Acting Comptroller Issues Statement on the FDIC’s Proposed Statement of Policy on Bank Merger Transactions

WASHINGTON—Acting Comptroller of the Currency Michael J. Hsu today issued the following statement at the Federal Deposit Insurance Corporation’s (FDIC) board meeting concerning the FDIC proposed statement of policy for merger transactions:

I support the FDIC’s proposed Statement of Policy on Bank Merger Transactions and its publication in the Federal Register. The proposed Statement of Policy aims to improve bank merger application outcomes and is broadly consistent with the proposed policy statement issued by the OCC in January. Both are intended to provide additional transparency around the agencies’ reviews of applications under the Bank Merger Act.

Bank merger applications exist along a spectrum – they are neither all good, nor all bad. By faithfully applying on a case-by-case basis the Bank Merger Act statutory factors, the diversity and dynamism of the U.S. banking system can be maintained and strengthened. Healthy bank mergers – i.e., those that benefit communities, support bank resilience and financial stability, and enhance competition – should be approved. Merger applications that would diminish competition, hurt communities, or present systemic risks should be withdrawn or rejected. Today’s proposed Statement of Policy, like the OCC’s, aims to offer further clarity into how the statutory factors will be weighed to achieve these outcomes.

On the issue of conditions, the proposed Statement of Policy provides that the FDIC will not use conditions as a means for favorably resolving any statutory factors that otherwise present material concerns. I concur with this approach. At the same time, in some instances targeted conditions can mitigate specific risks from a proposed merger transaction. These should be considered when they will be effective and where appropriate.

Thank you to FDIC staff for their hard work on the proposed Statement of Policy. I encourage all stakeholders and interested parties to provide comments.

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