FDIC Approves New Policy on Bank Mergers

WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) Board of Directors has approved a landmark final Statement of Policy on Bank Merger Transactions, known as the Final SOP. This policy update is poised to reshape the banking landscape by addressing the scope and evaluation process for bank mergers under FDIC oversight.

“The Final Statement of Policy on Bank Merger Transactions approved today updates, strengthens, and clarifies our approach to evaluating transactions subject to our approval,” said FDIC Chairman Gruenberg. The new policy focuses on enhancing transparency and ensuring that merged institutions pose less financial risk than their standalone counterparts.

The Final SOP includes several key changes:

1. Expands the scope of competitive effect evaluations to include concentrations beyond deposits, such as small business or residential loan originations.

2. Mandates that proposed mergers should result in reduced financial risk compared to individual institutions.

3. Emphasizes the need for mergers to better meet community needs and convenience.

4. Increases scrutiny on financial stability evaluations for institutions with over $100 billion in total assets.

5. Requires public hearings for mergers resulting in institutions with over $50 billion in assets.

This Final SOP replaces the 2008 policy, reflecting the significant changes in the banking industry and financial system over the past few decades. It also incorporates feedback from 23 comment letters submitted in response to the FDIC’s April 2024 Request for Comment on a proposed Statement of Policy Regarding Bank Merger Transactions.

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