This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

18740 

Vol. 87, No. 62 

Thursday, March 31, 2022 

1Bank Merger Act, Public Law 86–463, 72 Stat. 

129 (1960); Bank Merger Act Amendments of 1966, 

Public Law 89–356, 80 Stat. 7 (codified as amended 

at 12 U.S.C. 1828(c)(2018)), available at fdic.gov/ 

regulations/laws/rules/1000-2000.html#

1000sec.18c. 

2Prior to the Riegle-Neal Interstate Banking and 

Branching Efficiency Act of 1994, Public Law 103– 

328 (the Riegle-Neal Act of 1994), many states did 

not permit intra-state branching and interstate 

branch branching was not permitted. Following the 

passage of the Riegle-Neal Act of 1994, many bank 

holding companies chose to consolidate existing 

bank charters. 

3See Financial Stability Board, 2020 list of global 

systemic important banks, available at https://

www.fsb.org/wp-content/uploads/P111120.pdf. 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 303 

RIN 3064–ZA31 

Request for Information and Comment 

on Rules, Regulations, Guidance, and 

Statements of Policy Regarding Bank 

Merger Transactions 

AGENCY: Federal Deposit Insurance 

Corporation (FDIC). 

ACTION: Request for information and 

comment. 

SUMMARY: The FDIC is soliciting 

comments from interested parties 

regarding the application of the laws, 

practices, rules, regulations, guidance, 

and statements of policy (together, 

regulatory framework) that apply to 

merger transactions involving one or 

more insured depository institution, 

including the merger between an 

insured depository institution and a 

noninsured institution. The FDIC is 

interested in receiving comments 

regarding the effectiveness of the 

existing framework in meeting the 

requirements of section 18(c) of the 

Federal Deposit Insurance Act (known 

as the Bank Merger Act). 

DATES: Comments must be received by 

May 31, 2022. 

ADDRESSES: Commenters are encouraged 

to use the title ‘‘Request for Comment 

on Rules, Regulations, Guidance, and 

Statement of Policy on Bank Merger 

Transactions (RIN 3064–ZA31)’’ and to 

identify the number of the specific 

question(s) for comment to which they 

are responding. Please send comments 

by one method only directed to: 

• Agency Website: https://

www.fdic.gov/resources/regulations/ 

federal-register-publications/. Follow 

the instructions for submitting 

comments on the agency’s website. 

• Email: Comments@fdic.gov. Include 

RIN 3064–ZA31 in the subject line of 

the message. 

• Mail: James P. Sheesley, Assistant 

Executive Secretary, Attention: 

Comments—RIN 3064–ZA31, Federal 

Deposit Insurance Corporation, 550 17th 

Street NW, Washington, DC 20429. 

• Hand Delivery/Courier: Comments 

may be hand-delivered to the guard 

station at the rear of the 550 17th Street 

NW building (located on F Street NW) 

on business days between 7:00 a.m. and 

5:00 p.m. ET. 

Public Inspection: All comments 

received will be posted without change 

to https://www.fdic.gov/resources/ 

regulations/federal-registerpublications/—including any personal 

information provided—for public 

inspection. Paper copies of public 

comments may be ordered from the 

FDIC Public Information Center, 3501 

North Fairfax Drive, Room E–1002, 

Arlington, VA 22226, or by telephone at 

877–275–3342 or 703–562–2200. 

FOR FURTHER INFORMATION CONTACT: RaeAnn Miller, Senior Deputy Director, 

Supervisory Examinations and Policy, 

Division of Risk Management 

Supervision, 202–898–3898, rmiller@

fdic.gov; or Ashby G. Hilsman, Assistant 

General Counsel, Bank Activities and 

Regional Affairs Section, Supervision, 

Legislation and Enforcement Branch, 

Legal Division, 202–898–6636, 

ahilsman@fdic.gov. 

SUPPLEMENTARY INFORMATION: 

Background Information 

Significant changes over the past 

several decades in the banking industry 

and financial system necessitate a 

review of the regulatory framework that 

applies to bank merger transactions 

involving one or more insured 

depository institutions pursuant to the 

Bank Merger Act.1 First, more than three 

decades of consolidation and growth in 

the banking industry have significantly 

reduced the number of smaller banking 

organizations and increased the number 

of large and systemically-important 

banking organizations. Second, 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. 

Third, the Dodd-Frank Wall Street 

Reform and Consumer Protection Act 

(Dodd-Frank Act) amended the Bank 

Merger Act to include, for the first time, 

a financial stability factor. Fourth, and 

finally, a recent Executive Order 

instructed U.S. agencies to consider the 

impact that consolidation may have on 

maintaining a competitive marketplace. 

Thus, the FDIC has determined that it is 

both timely and appropriate to review 

the regulatory framework and consider 

whether updates or other changes are 

warranted. 

Consolidation in the Banking Sector 

The banking sector has experienced a 

significant amount of consolidation over 

the last 30 years as shown in Tables 1 

through 3. This period of consolidation, 

fueled in large part by mergers and 

acquisitions, has contributed to the 

significant growth of the number of 

large insured depository institutions, 

especially insured depository 

institutions with total assets of $100 

billion or more. 

In 1990, there was only one insured 

depository institution with assets 

greater than $100 billion; however, that 

number had increased to 33 by 2020.2

Of these 33 insured depository 

institutions with assets greater than 

$100 billion, nine were owned by the 

eight U.S. bank holding companies 

designated as Global Systemically 

Important Banks (U.S. GSIBs), and three 

were owned by foreign banking 

organizations designated as foreign 

Global Systemically Important Banks 

(foreign GSIBs).3 While insured 

depository institutions with total assets 

of more than $100 billion comprise less 

than one percent of the total number of 

insured depository institutions, they 

hold about 70 percent of total industry 

assets and 66 percent of domestic 

deposits. 

Consolidation also has contributed to 

the economic landscape of insured 

depository institutions with assets less 

than $100 billion. Over the same 30-year 

period, the number of institutions with 

assets less than $10 billion has declined 

from 15,099 in 1990 to 4,851 in 2020, 


jspears on DSK121TN23PROD with PROPOSALS1
Federal Register / Vol. 87, No. 62 / Thursday, March 31, 2022 / Proposed Rules 18741 

4Based on Thrift Financial Reports (TFR) and 

Consolidated Reports of Condition and Income (Call 

Report) between 1990 and 2005, the number of 

institutions with assets less than $10 billion 

declined from 15,099 to 8,715, before falling to 

4,851 in 2020. Over the same time period, the 

percentage of industry assets held by those banks 

declined from 66.4 percent in 1990 to 26.1 percent 

in 2005, and then to 14.8 percent in 2020. Similarly, 

the percentage of domestic deposits held by those 

institutions declined from 73.9 percent in 1990 to 

34.2 percent in 2005, and then to 15.4 percent in 

2020. 

5 Dodd-Frank Wall Street Reform and Consumer 

Protection Act, Public Law 111–203, section 604(f), 

124 Stat. 1376, 1602 (2010) (codified as 12 U.S.C. 

1828(c)(5) (2018)), available at https://

www.govinfo.gov/app/details/PLAW-111publ203. 

6See Federal Reserve Board and FDIC joint final 

rules: Resolution Plans Required, 76 FR 67323, 

(Nov. 1, 2011), available at https://

www.govinfo.gov/content/pkg/FR-2011-11-01/pdf/ 

2011-27377.pdf, and Tailored Resolution Plan 

Requirements, 80 FR 59194, (Nov. 1, 2019), 

available at https://www.govinfo.gov/content/pkg/ 

FR-2019-11-01/pdf/2019-23967.pdf. See also, FDIC 

final rule, Certain Orderly Liquidation Authority 

Provisions under Title II of the Dodd Frank Wall 

Street Reform and Consumer Protection Act, 76 FR 

41626, (July 15, 2011), available at https://

www.govinfo.gov/content/pkg/FR-2011-07-15/pdf/ 

2011-17397.pdf. 

7Although the FDIC has developed a framework 

of systemic resolution regulations, strategies, and 

policies and procedures to operationalize its 

authority to handle the orderly failure of a GSIB or 

other systemically important financial company 

under Title II of the Dodd-Frank Act, such a failure 

would present additional risks for the FDIC and 

could, depending on the circumstances, also 

involve failure of a large insured depository 

institution. 

a reduction of approximately 68 

percent.4 The declining number of 

smaller insured depository institutions 

may limit access to financial services 

and credit in communities, potentially 

adversely affecting the welfare of the 

communities’ workers, farmers, small 

businesses, startups, and consumers. 

Over this same period, the number of 

insured depository institutions with 

assets between $10 billion and $100 

billion has doubled from 59 in 1990 to 

118 in 2020. However, the percentage of 

total industry assets held by all insured 

depository institutions with assets less 

than $100 billion declined by 68 percent 

and their percentage of insured deposits 

held declined by approximately 70 

percent. 

Several insured depository 

institutions with assets less than $100 

billion were owned by either a U.S. 

GSIB or a foreign GSIB. For example, 12 

insured depository institutions with 

assets less than $10 billion were owned 

by GSIBs, with six owned by U.S. 

GSIBs, and six owned by foreign GSIBs. 

Further, 11 insured depository 

institutions with assets between $10 

billion to $100 billion were owned by 

GSIBs, with four owned by U.S. GSIBs, 

and seven owned by foreign GSIBs. 

TABLE 1—NUMBER OF INSURED DEPOSITORY INSTITUTIONS BY ASSET

SIZE

Asset size 

Year 

1990 2005 2020 

$10B–$50B ............. 52 86 102 

$50B–$100B ........... 7 21 16 

$100B–$250B ......... 1 5 20 

$250B–$500B ......... 0 3 8 

$500B–$700B ......... 0 0 1 

≥$700B ................... 0 3 4 

Source: TFR and Call Reports. 

TABLE 2—PERCENTAGE OF INDUSTRY

ASSETS HELD BY INSURED DEPOSITORY INSTITUTIONS BY ASSET SIZE

Asset size 

Year 

1990 

(%) 

2005 

(%) 

2020 

(%) 

$10B–$50B ............. 20.2 16.7 10.5 

$50B–$100B ........... 10.0 13.1 5.3 

$100B–$250B ......... 3.4 7.2 13.3 

$250B–$500B ......... 0.0 11.1 13.9 

$500B–$700B ......... 0.0 0.0 2.5 

≥$700B ................... 0.0 25.8 39.8 

Source: TFR and Call Report. 

TABLE 3—PERCENTAGE OF DOMESTIC

DEPOSITS HELD BY INSURED DEPOSITORY INSTITUTIONS BY ASSET SIZE

Asset size 

Year 

1990 

(%) 

2005 

(%) 

2020 

(%) 

$10B–$50B ............. 18.5 16.6 11.4 

$50B–$100B ........... 6.4 12.2 5.9 

$100B–$250B ......... 1.2 6.4 13.9 

$250B–$500B ......... 0.0 12.8 14.3 

$500B–$700B ......... 0.0 0.0 2.6 

≥$700B ................... 0.0 17.8 35.5 

Source: TFR and Call Report. 

The Financial Stability Factor in the 

Bank Merger Act and Large Bank 

Resolution 

The Dodd-Frank Act made a number 

of statutory changes aimed at addressing 

the risks posed by the largest banks, 

including an amendment to the Bank 

Merger Act requiring consideration of 

the risk posed to the stability of the 

United States banking or financial 

system of a proposed bank merger.5 To 

date, from a financial stability 

perspective, efforts to improve the 

resolvability of large banks have focused 

on GSIBs.6 As shown above, given the 

increased number, size, and complexity 

of non-GSIB large banks, however, a 

reconsideration by the FDIC of the 

framework for assessing the financial 

stability prong of the BMA and focused 

attention on the financial stability risks 

that could arise from a merger involving 

a large bank is warranted. 

In particular, the failure of a large 

insured depository institution would 

present significant challenges to the 

FDIC’s resolutions and receivership 

functions and could present a threat to 

the financial stability of the United 

States. Insured depository institutions 

are resolved under the Federal Deposit 

Insurance Act. For various reasons, 

including their size, sources of funding, 

and other organizational complexities, 

the resolution of large insured 

depository institutions can present great 

risk to the Deposit Insurance Fund, as 

well as extraordinary operational risk 

for the FDIC. In addition, as a practical 

matter, the size of an insured depository 

institution may limit the resolution 

options available to the FDIC in the 

event of failure.7

In recent history, including the global 

financial crisis that began in 2008, the 

most common resolution transactions 

have involved a purchase and 

assumption transaction where an 

acquiring institution takes all or a 

substantial part of the failed insured 

depository institution. For example, 

between 2008 and 2013, there were a 

total of 489 bank failures, of which 463, 

or approximately 95 percent, were 

resolved by the FDIC through purchase 

and assumption transactions. 

While most of these purchase and 

assumption resolution transactions were 

for insured depository institutions with 

assets under $10 billion, the largest 

purchase and assumption transaction 

completed by the FDIC was that of 

Washington Mutual Bank, which failed 

on September 25, 2008, with assets of 

approximately $307 billion. However, 

that transaction resulted in a larger and 

more complex acquirer (JPMorgan Chase 

& Co.), and the need for the resolution 

heightened financial turmoil and 

contributed to concerns about the safety 

of the financial system. As a result of 

the systemic concerns arising from the 

resolution of Washington Mutual Bank, 

when Wachovia Bank required 

resolution days later, the FDIC, the 

Board of Governors of the Federal 

Reserve System (Board), and the 

Secretary of the Treasury invoked the 

systemic risk exception (SRE) to allow 

the acquisition of Wachovia by another 


jspears on DSK121TN23PROD with PROPOSALS1
18742 Federal Register / Vol. 87, No. 62 / Thursday, March 31, 2022 / Proposed Rules 

8While the systemic risk exception was 

approved, Wachovia Corporation was ultimately 

acquired by Wells Fargo & Company on an openinstitution basis without FDIC assistance. See FDIC, 

Crisis and Response: An FDIC History, 2008–2013, 

available at http://www.fdic.gov/bank/historical/ 

crisis/. 

9See https://www.whitehouse.gov/briefing-room/ 

presidential-actions/2021/07/09/executive-orderon-promoting-competition-in-the-americaneconomy/and https://whitehouse.gov/briefingroom/statements-releases/2021/07/09/fact-sheetexecutive-order-on-promoting-competition-in-theamerican-economy/. 

10Bank Merger Act, Public Law 86–463, 72 Stat. 

129 (1960); Bank Merger Act Amendments of 1966, 

Public Law 89–356, 80 Stat. 7 (codified as amended 

at 12 U.S.C. 1828(c)(2018)), available at fdic.gov/ 

regulations/laws/rules/1000-2000.html#

1000sec.18c. 

11Pursuant to Title III of the Dodd–Frank Act, all 

functions of Office of Thrift Supervision relating to 

federal savings associations were transferred to the 

OCC, and all functions of the OTS relating to state 

savings associations were transferred to the FDIC. 

12 12 U.S.C. 1828(c)(1) and (2). For an uninsured 

national bank, OCC approval of the bank’s 

application under 12 CFR 5.33 is also required. 

13 12 U.S.C. 1828(c)(3)–(5) and 1828(c)(11). 

14All things being equal, the number of 

competitors in the market for banking products and 

services can be affected by two different types of 

transactions: Unaffiliated depository institutions 

can merge with each other; or depository 

institutions can be acquired by unaffiliated 

companies that already own one or more depository 

institutions. Companies that own or and control 

depository institutions are commonly known as 

depository institution holding companies and may 

either be bank holding companies or savings and 

loan holding companies. Depository institution 

holding companies are regulated by the Board. Bank 

holding companies are subject to the BHCA (for 

companies owning state and national banks, see 12 

U.S.C. 1841 et. seq.), and savings and loan holding 

companies are subject to the HOLA (for companies 

owning savings associations, see 12 U.S.C. 1461 et. 

seq.). It has been through the acquisition of 

depository institutions by existing depository 

institution holding companies, or the merger of 

these holding companies, that a number of 

depository institutions have come under the 

common control. The Board, in consultation with 

the U.S. Department of Justice (DOJ), analyzes the 

competitive impact of these acquisitions under 

standards similar to those applicable under the 

Bank Merger Act. For example, when depository 

institutions under common control merge, the DOJ 

and the federal banking agencies have determined 

that these mergers of affiliates are competitively 

neutral. Competitive analysis under the Bank 

Merger Act takes place when unaffiliated 

depository institutions merge and is performed by 

the responsible agency. 

15 12 U.S.C. 1828(c)(5)(B). 

16 12 U.S.C. 1828(c)(13)(A). 

17 Id. 

18 Dodd-Frank Wall Street Reform and Consumer 

Protection Act, Public Law 111–203, sec. 604(f), 124 

Stat. 1376, 1602 (2010) (codified as 12 U.S.C. 

1828(c)(5) (2018)), available at https://

www.govinfo.gov/app/details/PLAW-111publ203. 

large insured depository institution. At 

the time that the SRE was granted—the 

first-ever use of the SRE—Wachovia had 

total holding company assets of 

approximately $800 billion.8

Recent Executive Order 

Additionally, on July 9, 2021, the 

President signed an Executive Order on 

Promoting Competition in the American 

Economy (Executive Order).9 This 

Executive Order, in part, instructs U.S. 

agencies to consider the impact that 

consolidation may have on maintaining 

a fair, open, and competitive 

marketplace, and on the welfare of 

workers, farmers, small businesses, 

startups, and consumers. With respect 

to the banking sector specifically, the 

Executive Order directs the Attorney 

General, in consultation with the 

Chairman of the Board of Governors of 

the Federal Reserve System, the 

Chairperson of the Board of Directors of 

the Federal Deposit Insurance 

Corporation, and the Comptroller of the 

Currency, to adopt a plan for the 

revitalization of merger oversight under 

the Bank Merger Act and the Bank 

Holding Company Act (BHCA). 

Conclusion 

In light of the significant 

consolidation in the banking industry 

over the past three decades, the federal 

banking agencies requirement to 

consider financial stability risk under 

the BMA, the FDIC’s responsibilities for 

the resolution of large insured 

depository institutions, and the 

Executive Order, the FDIC is soliciting 

comments from interested parties 

regarding the rules, regulations, 

guidance, and statements of policy 

(together, regulatory framework) that 

apply to bank merger transactions 

involving one or more insured 

depository institutions. The FDIC is 

interested in receiving comments 

regarding the effectiveness of the 

existing regulatory framework in 

meeting the requirements of the Bank 

Merger Act. 

Bank Merger Act Overview 

The Bank Merger Act established a 

framework that required, in general, 

consent of the responsible agency prior 

to a merger.10 With respect to merger 

transactions solely involving insured 

depository institutions, the responsible 

agency is the FDIC if the resulting 

institution is a state nonmember bank or 

state savings association, the Federal 

Reserve Board if the resulting institution 

is a state member bank, and the Office 

of the Comptroller of the Currency 

(OCC) if the resulting institution is a 

national bank or federal savings 

association.11 With respect to any 

merger transaction involving an insured 

depository institution and a noninsured 

institution, the FDIC is the responsible 

agency notwithstanding the charter of 

the insured depository institution.12

In addition, the Bank Merger Act 

generally requires that, prior to 

approving any merger, the responsible 

agency must (a) ensure that notice of a 

proposed transaction be published; (b) 

request a report on competitive factors 

from the Attorney General of the United 

States for merger transactions involving 

nonaffiliates; (c) not approve any 

proposed merger that would result in a 

monopoly or produce substantial 

anticompetitive effects; and (d) consider 

certain additional factors, including the 

financial and managerial resources and 

future prospects of the existing and 

proposed institutions, the convenience 

and needs of the community to be 

served, the risk to the stability of the 

United States banking or financial 

system, and the effectiveness of any 

insured depository institution involved 

in the merger at combatting money 

laundering.13

When assessing the potential 

anticompetitive effects of the proposed 

merger, the responsible agency is 

required to consider whether the merger 

would substantially lessen competition, 

tend to create a monopoly, or otherwise 

be in restraint of trade.14 In no case may 

the responsible agency approve a merger 

transaction that would result in a 

monopoly, and the responsible agency 

may not approve any merger that 

exhibits anticompetitive effects unless 

the responsible agency determines ‘‘that 

the anticompetitive effects of the 

proposed transaction are clearly 

outweighed in the public interest by the 

probable effect of the transaction in 

meeting the convenience and needs of 

the community to be served.’’ 15 Further, 

the responsible agency may not approve 

an application for an interstate merger 

transaction if the resulting insured 

depository institution would control 

more than 10 percent of the total 

amount of deposits of insured 

depository institutions in the United 

States.16

In addition to consideration of 

anticompetitive effects, the Bank Merger 

Act requires that: ‘‘In every case, 

[emphasis added] the responsible 

agency shall take into consideration the 

financial and managerial resources and 

future prospect of the existing and 

proposed institutions, the convenience 

and needs of the community to be 

served, and the risk to the stability of 

the United States banking or financial 

system.’’ 17 The latter condition—that 

the responsible agency consider 

financial stability—was added in 2010 

by section 604(f) of the Dodd-Frank 

Act.18


jspears on DSK121TN23PROD with PROPOSALS1
Federal Register / Vol. 87, No. 62 / Thursday, March 31, 2022 / Proposed Rules 18743 

19 12 CFR part 303, available at https://

www.fdic.gov/regulations/laws/rules/2000- 

250.html. 

20 12 CFR 5.33, available at https://www.ecfr.gov/ 

current/title-12/chapter-I/part-5. 

21See 12 CFR 303.1–303.19. 

22See 12 CFR 303.60–303.65. 

23 63 FR 44762, August 20, 1998, effective 

October 1, 1998; amended at 67 FR 48178, July 23, 

2002; 67 FR 79278, December 27, 2002; and 73 FR 

8871, February 15, 2008, available at https://

www.fdic.gov/regulations/laws/rules/5000- 

1200.html. 

24The FDIC’s Application Procedures Manual 

provides a non-exhaustive list of quantitative 

metrics, as well as qualitative factors, to be 

considered when evaluating the financial stability 

factor. FDIC Application Procedures Manual: 

Mergers, available at https://www.fdic.gov/ 

regulations/applications/resources/apps-procmanual/section-04-mergers.pdf. 

25See, e.g., OCC Conditional Approval No. 1031 

(April 6, 2012). See also the ‘‘Business 

Combinations’’ booklet of the Comptroller’s 

Licensing Manual, available at https://occ.gov/ 

publications-and-resources/publications/ 

comptrollers-licensing-manual/files/bizcombo.pdf. 26 In September 2020, DOJ sought comment on 

whether to revise the Guidelines or its competitive 

analysis of bank mergers. See https://

www.justice.gov/opa/pr/antitrust-division-seekspublic-comments-updating-bank-merger-reviewanalysis. 27Available at http://justice.gov/atr/bank-mergercompetitive-review-introduction-and-overview1995. 

28The HHI is a statistical measure of market 

concentration and is also used as the principal 

measure of market concentration in the Department 

of Justice’s Merger Guidelines. The HHI for a given 

market is calculated by squaring each individual 

competitor’s share of total deposits within the 

market and then summing the squared market share 

products. For example, the HHI for a market with 

a single competitor would be: 1002 = 10,000: for a 

market with five equal competitors with equal 

market shares, the HHI would be: 202 + 202 + 202

+ 202 + 202 = 2,000. 

29Section 2 of the Interagency Guidelines, 

available at www.justice.gov/atr/bank-mergercompetitive-review-introduction-and-overview1995. 

FDIC and OCC Regulations and 

Statement of Policy Regarding Bank 

Mergers 

The requirements of the Bank Merger 

Act are incorporated into 12 CFR part 

303 of the FDIC’s regulations 19 and into 

the OCC’s regulations at 12 CFR 5.33.20

In the FDIC’s regulations, subpart A of 

12 CFR part 303 provides regulations 

that are generally applicable for all 

filings and includes general filing 

procedures, computation of time, the 

effect of Community Reinvestment Act 

(CRA) performance on filing, and the 

administrative procedures associated 

with a filing.21 Subpart D of 12 CFR part 

303 provides regulations specifically 

pertaining to mergers involving an 

insured depository institution and 

includes definitions, transactions 

requiring prior approval, filing 

procedures, expedited and standard 

processing procedures, and public 

notice requirements.22 Additional 

guidance on the FDIC’s processing of 

merger transactions is set forth in the 

FDIC Statement of Policy on Bank 

Merger Transactions (FDIC Policy 

Statement).23

For those transactions requiring FDIC 

approval, the FDIC Statement of Policy 

describes the four factors that the FDIC 

will consider in its review: Competitive 

factors, prudential factors, convenience 

and needs factor, and anti-money 

laundering record. The FDIC Policy 

Statement also describes related 

considerations such as those related to 

interstate bank merger transactions, 

interim merger transactions, branch 

closings, legal fees and other expenses, 

and trade names. The FDIC Policy 

Statement, however, does not address 

the financial stability provisions added 

to the Bank Merger Act under section 

604(f) of the Dodd-Frank Act.24

The OCC’s regulation, at 12 CFR 5.33, 

provides a framework for evaluating 

mergers, which includes the 

consideration of the risk to financial 

stability. 12 CFR 5.33 generally 

addresses business combinations 

involving a national bank or federal 

savings association. Section 5.33(c) 

covers the licensing requirements for 

business combinations. The factors the 

OCC considers in all business 

combinations, including business 

combinations under the BMA, are set 

forth in § 5.33(e)(1)(i), and 

§§ 5.33(e)(1)(ii) & (iii) provide the 

additional factors that the OCC 

considers for business combinations 

under the Bank Merger Act. 

When considering the risk to the 

stability of the banking or financial 

system pursuant to a BMA application, 

the OCC considers six factors: (1) 

Whether the proposed transaction 

would result in a material increase in 

risks to financial system stability due to 

an increase in size of the combining 

institutions; (2) whether the transaction 

would result in a reduction in the 

availability of substitute providers for 

the services offered by the combining 

institutions; (3) whether the combined 

institution would engage in any 

business activities or participate in 

markets in a manner that, in the event 

of financial distress of the combined 

institution, would cause significant 

risks to other institutions; (4) whether 

the transaction would materially 

increase the extent to which the 

combining institutions contribute to the 

complexity of the financial system; (5) 

whether the transaction would 

materially increase the extent of crossborder activities of the combining 

institutions; and (6) whether the 

transaction would increase the relative 

degree of difficulty of resolving or 

winding up the combined institution.25

1995 Bank Merger Competitive Review 

Guidelines 26

In order to expedite the competitive 

review process required by the BHCA, 

Home Owners Loan Act (HOLA), and 

the Bank Merger Act, and to reduce 

regulatory burden, the DOJ, in 

consultation with the federal banking 

agencies, developed the 1995 Bank 

Merger Competitive Review Guidelines 

(Guidelines).27 The Guidelines state that 

merger review will rely primarily on the 

effects of competition in predefined 

markets determined by the Board. To 

the extent that the post-merger 

Herfindahl-Hirschman Index (HHI) does 

not exceed 1800 or increase by more 

than 200, the federal banking agencies 

generally are unlikely to review further 

the competitive effects of the merger.28

However, the Guidelines provide that 

the federal banking agencies may 

examine a merger transaction in greater 

detail if the federal banking agencies 

believe additional scrutiny is necessary. 

As part of this further examination 

under the Guidelines, the federal 

banking agencies may consider, among 

other things, whether there is evidence 

that (a) the merging parties do not 

significantly compete with one another; 

(b) rapid economic change has resulted 

in an outdated geographic market 

definition and an alternate market is 

more appropriate; (c) market shares are 

not an adequate indicator of the extent 

of competition in the market; (d) a thrift 

institution is actively engaged in 

providing services to commercial 

customers, particularly loans for 

business startup or working capital 

purposes and cash management 

services; (e) a credit union has such 

membership restrictions, or lack of 

restrictions, and offers such services to 

commercial customers that it should be 

considered to be in the market; (f) there 

is actual competition by out-of-market 

institutions for commercial customers, 

particularly competition for loans for 

business startup or working capital 

purposes; and (g) there is actual 

competition by non-bank institutions for 

commercial customers, particularly 

competition for loans for business 

startup or working capital purposes.29

Request for Comment 

The FDIC is seeking comment on all 

aspects of the existing regulatory 

framework that applies to bank merger 

transactions. In responding to the 

following questions, the FDIC asks that 

commenters please include quantitative 

as well as qualitative support for their 

responses, as applicable. 


jspears on DSK121TN23PROD with PROPOSALS1
18744 Federal Register / Vol. 87, No. 62 / Thursday, March 31, 2022 / Proposed Rules 

Question 1. Does the existing 

regulatory framework properly consider 

all aspects of the Bank Merger Act as 

currently codified in Section 18(c) of the 

Federal Deposit Insurance Act? 

Question 2. What, if any, additional 

requirements or criteria should be 

included in the existing regulatory 

framework to address the financial 

stability risk factor included by the 

Dodd-Frank Act? Are there specific 

quantitative or qualitative measures that 

should be used to address financial 

stability risk that may arise from bank 

mergers? If so, are there specific 

quantitative measures that would also 

ensure greater clarity and 

administrability? Should the FDIC 

presume that any merger transaction 

that results in a financial institution that 

exceeds a predetermined asset size 

threshold, for example $100 billion in 

total consolidated assets, poses a 

systemic risk concern? 

Question 3. To what extent should 

prudential factors (for example, capital 

levels, management quality, earnings, 

etc.) be considered in acting on a merger 

application? Should bright line 

minimum standards for prudential 

factors be established? If so, what 

minimum standard(s) should be 

established and for which prudential 

factor(s)? 

Question 4. To what extent should the 

convenience and needs factor be 

considered in acting on a merger 

application? Is the convenience and 

needs factor appropriately defined in 

the existing framework? Is the reliance 

on an insured depository institution’s 

successful Community Reinvestment 

Act performance evaluation record 

sufficient? Are the convenience and 

needs of all stakeholders appropriately 

addressed in the existing regulatory 

framework? To what extent and how 

should the convenience and needs 

factor take into consideration the impact 

that branch closings and consolidations 

may have on affected communities? To 

what extent should the FDIC 

differentiate its consideration of the 

convenience and needs factor when 

considering merger transactions 

involving a large insured depository 

institution and merger transactions 

involving a small insured depository 

institution? To what extent should the 

CFPB be consulted by the FDIC when 

considering the convenience and needs 

factor and should that consultation be 

formalized? 

Question 5. In addition to the HHI, are 

there other quantitative measures that 

the federal banking agencies should 

consider when reviewing a merger 

application? If so, please describe the 

measures and how such measures 

should be considered in conjunction 

with the HHI. To what extent should 

such quantitative measures be 

differentiated when considering mergers 

involving a large insured depository 

institution and mergers involving only 

small insured depository institutions? 

Question 6. How and to what extent 

should the following factors be 

considered in determining whether a 

particular merger transaction creates a 

monopoly or is otherwise 

anticompetitive? 

Please address the following factors: 

(a) The merging parties do not 

significantly compete with one another; 

(b) Rapid economic change has 

resulted in an outdated geographic 

market definition and an alternate 

market is more appropriate; 

(c) Market shares are not an adequate 

indicator of the extent of competition in 

the market; 

(d) A thrift institution is actively 

engaged in providing services to 

commercial customers, particularly 

loans for business startup or working 

capital purposes and cash management 

services; 

(e) A credit union has such 

membership restrictions, or lack of 

restrictions, and offers such services to 

commercial customers that it should be 

considered to be in the market; 

(f) There is actual competition by outof-market institutions for commercial 

customers, particularly competition for 

loans for business startup or working 

capital purposes; and 

(g) There is actual competition by 

non-bank institutions for commercial 

customers, particularly competition for 

loans for business startup or working 

capital purposes. With respect to the 

preceding factors, how and to what 

extent should the activity of current 

branches or pending branch 

applications be considered? 

Question 7. Does the existing 

regulatory framework create an implicit 

presumption of approval? If so, what 

actions should the FDIC take to address 

this implicit presumption? 

Question 8. Does the existing 

regulatory framework require an 

appropriate burden of proof from the 

merger applicant that the criteria of the 

Bank Merger Act have been met? If not, 

what modifications to the framework 

would be appropriate with respect to 

the burden of proof? 

Question 9. The Bank Merger Act 

provides an exception to its 

requirements if the responsible agency 

finds that it must act immediately in 

order to prevent the probable failure of 

one of the insured depository 

institutions involved in the merger 

transaction. To what extent has this 

exception proven beneficial or 

detrimental to the bank resolution 

process and to financial stability? 

Should any requirements or controls be 

put into place regarding the use of this 

exemption, for example when 

considering purchase and assumption 

transactions in a large bank resolution? 

Are there attributes of GSIB 

resolvability, such as a Total LossAbsorbing Capacity (TLAC) 

requirement, that could be put into 

place that would facilitate the resolution 

of a large insured depository institution 

without resorting to a merger with 

another large institution or a purchase 

and assumption transaction with 

another large institutions? 

Question 10. To what extent would 

responses to Questions 1–9 differ for the 

consideration of merger transactions 

involving a small insured depository 

institution? Should the regulations and 

policies of the FDIC be updated to 

differentiate between merger 

transactions involving a large insured 

depository institution and those 

involving a small insured depository 

institution? If yes, please explain. How 

should the FDIC define large insured 

depository institutions for these 

purposes? 

Federal Deposit Insurance Corporation. 

By order of the Board of Directors. 

Dated at Washington, DC, on December 6, 

2021. 

Harrel M. Pettway, 

Executive Secretary. 

Editorial note: This document was 

received for publication by the Office of the 

Federal Register on March 25, 2022. 

[FR Doc. 2022–06720 Filed 3–30–22; 8:45 am] 

BILLING CODE 6714–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2022–0382; Project 

Identifier MCAI–2021–01452–T] 

RIN 2120–AA64 

Airworthiness Directives; Airbus SAS 

Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: The FAA proposes to adopt a 

new airworthiness directive (AD) for all 

Airbus SAS Model A350–941 and –1041 

airplanes. This proposed AD was 

prompted by reports that passenger door 


jspears on DSK121TN23PROD with PROPOSALS1