FDIC Proposes Overhaul of Bank Merger Review Process

The FDIC proposed a rule to restructure its review of merger transactions under Federal Deposit Insurance Act Section 18 ("Regulations governing insured depository institutions") by tailoring filing requirements to the risk profile of the merging institutions.

The proposal would create a rapid processing framework for de minimis merger transactions, which would include a letter filing requirement and deemed approval. For other merger transactions, the proposal would set prescribed processing deadlines where none exist today, including 90 days for filings resulting in an institution under $50 billion in assets and 150 days for all others. It would also cut the number of required newspaper publications from three to two, and shorten the public comment period to 15 days for corporate reorganizations while eliminating it for de minimis transactions.

The FDIC would also clarify and limit its ability to remove a filing from expedited processing. Additionally, the rule would establish a predictable standard for determining whether a transaction qualifies as a "merger in substance."

The proposal would adjust the competitive effects analysis to incorporate credit union shares and centrally booked deposits. It would also modify the framework used to evaluate the financial stability factor (see prior coverage).

Comments are due 60 days after publication in the Federal Register.