The board of directors of the Federal Deposit Insurance Corporation approved a proposal to reverse a policy implemented during the Biden era that intensified the examination of large bank mergers, as announced in a statement on Monday.
The proposal will temporarily reintroduce the merger policy that was in place before 2024 while the FDIC undertakes a broader reassessment of its bank merger review process.
The decision by the Republican-led FDIC overturns the efforts made by previous Democratic leadership to impose stricter scrutiny on potential bank mergers, especially concerning larger institutions.
The prior policy, enacted in 2024, would have subjected larger banks involved in mergers to significantly stricter oversight. For instance, the previous policy stipulated that any bank merger resulting in an institution with assets exceeding $50 billion should undergo public hearings and feedback, and mergers leading to a bank with assets over $100 billion should face heightened analysis for financial stability risks.
This more stringent approach was part of a broader initiative to increase scrutiny on corporate mergers during the Biden administration, which is anticipated to recede under the more business-friendly Trump administration.
Banks have long complained that the process of obtaining regulatory approvals for mergers is arduous, time-consuming, and unclear. The Bank Policy Institute, which represents larger institutions, criticized the previous FDIC policy, contending that it heightened regulatory uncertainty for banks and exceeded the boundaries established by Congress.