FDIC Proposes Major Overhaul of Bank Merger Review Rules
The FDIC's proposed rulemaking would create a 'deemed approval' process for smaller deals, update competitive analysis metrics, and establish firm timelines for merger application reviews.
The FDIC has proposed a significant overhaul of its framework for reviewing bank mergers. The new rule would introduce a five-day 'deemed approval' process for 'de minimis' transactions that fall below HSR thresholds and meet other criteria, potentially accelerating smaller deals. For all transactions, the competitive-effects analysis would be updated to include credit union shares and centrally booked deposits in the Herfindahl–Hirschman Index calculation, with a new safe harbor for transactions resulting in an HHI of 1,800 or less. The proposal also establishes structured processing timelines of 90 to 150 days, depending on institution size, and sets a clear quantitative test for what constitutes a 'merger in substance.' Sophisticated counsel should advise clients on how these proposed changes could affect future M&A strategy. The immediate next step is the 60-day public comment period following the proposal's publication in the Federal Register, offering an opportunity to shape the final rule.