The Federal Deposit Insurance Corporation (FDIC) has sent the Federal Register a request for information soliciting comments on the laws and rules around merger transactions between one or more insured depository institutions, the FDIC announced Friday (March 25).
According to the press release, this includes mergers between insured depository institutions and a noninsured institutions.
The FDIC wants to know about the effectiveness of the existing framework, as there have been “significant changes” over the last few decades in the banking industry. It also wants to review the regulatory framework.
Earlier this month, PYMNTS wrote that the Federal Reserve and the Office of the Comptroller of the Currency had a meeting about the proposed merger between US Bancorp and MFUG Union Bank. The hearing followed a March 4 approval of the M&T Bank and People’s United Financial deal.
The report noted how these events show the changes to mergers and acquisitions (M&A) in the banking sector, with the Federal Reserve taking more time to approve deals.
If other legislative proposals get passed, the mergers could take even longer, such as Sen. Elizabeth Warren’s Bank Review Modernization Act of 2021 — which, if approved, would make it so the Consumer Financial Protection Bureau (CFPB) had to approve a merger when one of the companies offered consumer financial products.
In addition, it would make it so regulators had to look more into the anticompetitive effects of the deal. As of early March, the bill was still in the early stages of the legislative procedure.
PYMNTS also noted that the acting chairman of the FDIC, Martin J. Gruenberg, had said earlier this year that one of the agency’s priorities this year is to take a closer look at bank mergers. Rohit Chopra, CFPB director and FDIC board member, also supported reviewing the regulatory framework for that.
All of it is an example of the greater attention being given to the bank merger policy after President Biden’s “Executive Order on Promoting Competition in the American Economy.”