The Federal Deposit Insurance Corporation (FDIC) is seeking comment and feedback on the effectiveness of current rules and regulations related to bank mergers.
Specifically, the request for information (RFI) is seeking comments regarding the application of the laws, practices, rules, regulations, guidance, and statements of policy that apply to mergers involving one or more insured depository institutions. This would include a merger between an insured depository institution and a noninsured institution.
The FDIC would like to gauge the effectiveness of the existing framework in meeting the requirements of section 18(c) of the Federal Deposit Insurance Act – also known as the Bank Merger Act.
The RFI is prompted by significant changes that have taken place over the past several decades in the banking industry and financial system. Specifically, the RFI states that three decades of consolidation and growth in the banking industry have significantly reduced the number of smaller banks and increased the number of large and systemically important banks.
Also, the FDIC has a responsibility to promote public confidence in the banking system, maintain financial stability, review proposed mergers, and resolve failing large insured depository institutions.
In addition, the Dodd-Frank Wall Street Reform and Consumer Protection Act amended the Bank Merger Act to include a financial stability factor. Finally, a recent executive order instructed U.S. agencies to consider the impact that consolidation may have on maintaining a competitive marketplace.
The FDIC is accepting comments within 60 days of publication in the Federal Register. The responses will help inform any potential policymaking in this area.