FDIC Plans Merger Squelch

Both the policy and politics of the FDIC’s proposed merger policy follow that of its 2022 RFI (see FSM Report MERGER9), a very stringent approach to bank-merger review that split the FDIC 3-2 on party lines.  We will shortly provide clients with an in-depth analysis of the proposed approach, approved on a 3-2 vote.  It tracks much in the OCC’s proposal (see FSM Report MERGER14) but is still more stringent in several key areas.  Notably, it does not rely on qualitative financial-stability considerations, instead setting a $100 billion threshold for additional scrutiny.

Chopra Wants Far Tougher Bank-Merger Policy

CFPB Director Chopra elaborated today on his comments at the FDIC meeting, saying that he thinks the proposal is fine as far as it goes but that federal policy should go considerably further to curtail bank consolidation.  Actions he advocates include hard caps on bank growth and size (presumably meaning a limit on organic growth as well as via acquisition) and a roll-back of the systemic exemption in failing-bank acquisitions to block any future JPM/FRC-style transactions.