The return to the FDIC's long-standing bank merger process is expected to restore clarity and predictability and support industry deals
On July 5, 2025, the FDIC finalized (and published in the Federal Register) its decision to rescind its 2024 Bank Merger Statement of Policy and reinstate its prior, long-standing version. We previously covered the proposed restoration, which is consistent with Acting Chair Hill's 2025 priorities. The restored policy takes effect on August 4, 2025, and is expected to streamline the bank merger process by restoring clarity and predictability to how the FDIC evaluates applications.
Key Takeaways
- The FDIC has officially rescinded its 2024 Bank Merger Policy, citing concerns over confusion, subjectivity, and unpredictability.
- Effective August 4, 2025, the previous merger policy and review framework (originally adopted in 1998 and last revised in 2008) will be reinstated.
- The reinstated policy relies on more objective antitrust thresholds and more predictable standards for evaluating financial, managerial, and community factors.
- With the return to a more favorable and familiar policy environment, institutions are more likely to take advantage of the regulatory clarity with new deals.
- The FDIC's merger policy has a potentially broad application. It applies to both FDIC-supervised institutions as well as any insured depository institution—regardless of its charter type—that merges with an uninsured entity. Thus, the FDIC's policy can apply to national banks that, for instance, merge with uninsured fintechs, digital asset and technology companies, and other entities.
- This appears to be only an interim step. The FDIC is considering broader changes to the merger framework that are expected to broadly support merger activities in the financial services industry.
The Current—Now Outgoing—Policy
Under the prior administration, the FDIC issued a Statement of Policy on Bank Merger Transactions. Overall, the 2024 policy was considered to slow deal activity and introduce new, unfamiliar, and unclear requirements on top of the standard Bank Merger Act factors.
For instance, the 2024 policy introduced requirements that the resulting entity demonstrate it will better meet the needs of the community and that it will have better financial resources (in the long term)—rather than just meeting those standards. In addition, the 2024 policy was designed to be "principles based," which effectively increased the FDIC's discretion for merger approvals. The 2024 policy also emphasized the FDIC's expansive jurisdiction over "mergers in substance," such as when an insured institution absorbs nearly all of a target entity's assets.
The Restored Framework
The FDIC's return to the prior framework is expected to increase predictability in the merger review process. The 2008 policy is familiar, well-understood, and widely viewed as more efficient. It reestablishes clear benchmarks for competition analysis, reinforces traditional standards for evaluating financial and managerial fitness, and offers applicants better visibility into timelines and requirements.
Unified Regulatory Approach
The FDIC's move is consistent with the recent policy changes at the OCC. The OCC released a similar rule in 2024 to revise its own merger policy, which applies to mergers where the surviving entity is a national bank. This unified approach is typical of the current administration's approach to bank regulation, with the Treasury Secretary playing a coordinating role.
Unlike the FDIC change, however, the Biden Administration's OCC rule was reversed in May 2025 by a resolution brought under the Congressional Review Act (CRA). This means that the OCC cannot release another rule in substantially the same form as its 2024 merger policy. The FDIC's 2024 policy has not been subject to the CRA. It is possible that given the size and importance of the largest national banks, and a future Comptroller of the Currency's more direct role in setting policy, the OCC's policy was seen as requiring more scrutiny and durability. In contrast, the FDIC has a board structure and is not subject to one person's decision, making it less susceptible to radical policy changes.
While the DOJ and FTC continue to support the 2023 Merger Guidelines—despite their non-adoption by federal banking agencies—they appear focused on the Trump's Administration's antitrust priorities in sectors where most household spending occurs, such as housing, healthcare, insurance, transportation, food and groceries, and entertainment. Roger Alford, the DOJ's Principal Deputy Assistant Attorney General for Antitrust, recently emphasized the importance of not discouraging deal-making. He also signaled the DOJ's willingness to resolve concerns through negotiated remedies, such as consent orders, rather than immediate enforcement actions. Although this approach does not directly apply to how the FDIC and OCC may evaluate bank mergers, it reflects the broader direction of the Administration's stance on M&A activity.
Future—Comprehensive—Merger Policy Changes Expected
Acting Chair Hill has explained that under his leadership the FDIC will "[i]mprove the bank merger approval process and replace the 2024 Statement of Policy to ensure that merger transactions that satisfy the Bank Merger Act are approved in a timely way" (emphasis in the original).
In addition to comments already received from the proposed restoration of the FDIC merger policy (generally asking for clarity, consistency, transparency, as well as streamlined applications and other relief), the FDIC has announced that it will seek additional public comments in connection with a future proposal to comprehensively revise merger policy.
Commenters should consider providing data-driven analyses for the FDIC to develop a durable and sustainable regulatory framework for deals moving forward.
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