Proposed Rule2025-03832
Statement of Policy on Bank Merger Transactions
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 11, 2025
Issuing agencies
Federal Deposit Insurance Corporation
Abstract
The FDIC is requesting public comment on a proposal to rescind the Statement of Policy on Bank Merger Transactions published in 2024 and reinstate its prior Statement of Policy on Bank Merger Transactions. The FDIC expects to request comment on all aspects of the regulatory framework governing the FDIC's review of bank merger transactions in connection with a future proposal to comprehensively revise its merger policy.
Full Text
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<title>Federal Register, Volume 90 Issue 46 (Tuesday, March 11, 2025)</title>
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[Federal Register Volume 90, Number 46 (Tuesday, March 11, 2025)]
[Proposed Rules]
[Pages 11679-11683]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-03832]
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Proposed Rules
Federal Register
________________________________________________________________________
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.
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Federal Register / Vol. 90, No. 46 / Tuesday, March 11, 2025 /
Proposed Rules
[[Page 11679]]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 303
RIN 3064-ZA45
Statement of Policy on Bank Merger Transactions
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Proposed rescission and reinstatement of statement of policy;
request for comment.
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SUMMARY: The FDIC is requesting public comment on a proposal to rescind
the Statement of Policy on Bank Merger Transactions published in 2024
and reinstate its prior Statement of Policy on Bank Merger
Transactions. The FDIC expects to request comment on all aspects of the
regulatory framework governing the FDIC's review of bank merger
transactions in connection with a future proposal to comprehensively
revise its merger policy.
DATES: Comments must be received on or before April 10, 2025.
ADDRESSES: You may submit comments to the FDIC, identified by RIN 3064-
ZA45, by any of the following methods:
<bullet> Agency Website: <a href="https://www.fdic.gov/resources/regulations/federal-register-publications">https://www.fdic.gov/resources/regulations/federal-register-publications</a>. Follow instructions for
submitting comments on the FDIC's website.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#9dfef2f0f0f8f3e9eedddbd9d4deb3faf2eb"><span class="__cf_email__" data-cfemail="caa9a5a7a7afa4beb98a8c8e8389e4ada5bc">[email protected]</span></a>. Include the RIN 3064-ZA45 in the
subject line of the message.
<bullet> Mail: Jennifer Jones, Deputy Executive Secretary,
Attention: Comments/Legal OES (RIN 3064-ZA45), Federal Deposit
Insurance Corporation, 550 17th Street NW, Washington, DC 20429.
<bullet> Hand Delivered/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 a.m. and 5 p.m.
Public Inspection: Comments received, including any personal
information provided, may be posted without change to <a href="https://www.fdic.gov/resources/regulations/federal-registerpublications/">https://www.fdic.gov/resources/regulations/federal-registerpublications/</a>.
Commenters should submit only information they wish to make available
publicly. The FDIC may review, redact, or refrain from posting all or
any portion of any comment that it may deem to be inappropriate for
publication, such as irrelevant or obscene material. The FDIC may post
only a single representative example of identical or substantially
identical comments, and in such cases will generally identify the
number of identical or substantially identical comments represented by
the posted example. All comments that have been redacted, as well as
those that have not been posted, that contain comments on the merits of
this notice will be retained in the public comment file and will be
considered as required under all applicable laws. All comments may be
accessible under the Freedom of Information Act.
FOR FURTHER INFORMATION CONTACT: Division of Risk Management
Supervision: Thomas F. Lyons, Associate Director of Risk Management
Policy, (202) 898-6850, <a href="/cdn-cgi/l/email-protection#a6d2cadfc9c8d5e6c0c2cfc588c1c9d0"><span class="__cf_email__" data-cfemail="21554d584e4f5261474548420f464e57">[email protected]</span></a>; George Small, Senior
Examination Specialist, (347) 267-2453, <a href="/cdn-cgi/l/email-protection#1e796d737f72725e787a777d30797168"><span class="__cf_email__" data-cfemail="b8dfcbd5d9d4d4f8dedcd1db96dfd7ce">[email protected]</span></a>. Legal
Division: Annmarie Boyd, Assistant General Counsel, (202) 898-3714,
<a href="/cdn-cgi/l/email-protection#3150535e485571575558521f565e47"><span class="__cf_email__" data-cfemail="fd9c9f928499bd9b99949ed39a928b">[email protected]</span></a>; Benjamin Klein, Senior Counsel, (202) 898-7027,
<a href="/cdn-cgi/l/email-protection#35575e59505c5b7553515c561b525a43"><span class="__cf_email__" data-cfemail="e7858c8b828e89a781838e84c9808891">[email protected]</span></a>; Amanda Ledig, Counsel, (972) 761-5895,
<a href="/cdn-cgi/l/email-protection#a6c7cac3c2cfc1e6c0c2cfc588c1c9d0"><span class="__cf_email__" data-cfemail="0a6b666f6e636d4a6c6e6369246d657c">[email protected]</span></a>; Nicholas Simons, Counsel, (202) 898-6785,
<a href="/cdn-cgi/l/email-protection#c1afb2a8acaeafb281a7a5a8a2efa6aeb7"><span class="__cf_email__" data-cfemail="0e607d676361607d4e686a676d20696178">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
Section 18(c) of the Federal Deposit Insurance Act (FDI Act), which
codifies the Bank Merger Act (BMA), prohibits an insured depository
institution (IDI) from engaging in a bank merger transaction except
with the prior approval of the responsible Federal banking agency.\1\
The FDIC has jurisdiction to act on merger transactions that solely
involve IDIs in which the acquiring, assuming, or resulting institution
is an FDIC-supervised institution.\2\ The FDIC also has jurisdiction to
act on merger transactions that involve an IDI and any non-insured
entity, notwithstanding the IDI's charter.\3\
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\1\ 12 U.S.C. 1828(c).
\2\ 12 U.S.C. 1828(c)(2).
\3\ 12 U.S.C. 1828(c)(1).
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The FDIC published a request for comment on a proposed Statement of
Policy on Bank Merger Transactions in the Federal Register on April 19,
2024,\4\ and subsequently issued it as final on September 27, 2024 (the
2024 Statement).\5\ The 2024 Statement superseded the FDIC's prior
Statement of Policy on Bank Merger Transactions (Merger Policy
Statement), which was initially adopted in 1998 and amended most
recently in 2008.\6\
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\4\ 89 FR 29222 (April 19, 2024).
\5\ 89 FR 79125 (Sep. 27, 2024).
\6\ See 63 FR 44761 (Aug. 20, 1998), 67 FR 48178 (Jul. 23,
2002), 67 FR 79278 (Dec. 27, 2002), and 73 FR 8870 (Feb. 15, 2008).
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II. Overview of the Notice
A. Purpose
The FDIC is pursuing this action in light of concerns that
implementation of the 2024 Statement has added considerable uncertainty
to the merger application process. As an example, the 2024 Statement
has led to a number of questions regarding when merger applications are
required.\7\ The 2024 Statement also deemphasizes the use of the
Herfindahl-Hirschman Index (HHI) thresholds in the competitive effects
analysis, which have long served as a predictable proxy for determining
whether a proposed transaction is anticompetitive,\8\ and replaces it
with more subjective criteria. In addition, the 2024 Statement places
an affirmative burden on applicants to demonstrate that a merger
transaction will enable the resulting institution to better meet the
convenience and needs of the community to be served than would
otherwise occur in the absence of the merger without offering any
objective or quantifiable criteria regarding how the FDIC will evaluate
this factor.\9\ The combined effect of these and several
[[Page 11680]]
other provisions of the 2024 Statement is that the FDIC's bank merger
review process has become less transparent and less predictable,
leaving prospective applicants unclear about their prospects for
approval and the resources and time they will need to allocate to the
merger application process. Accordingly, in the interim, the FDIC is
proposing to return to the historical approach, which is well-
understood by the public and market participants, while the agency
develops future policy.
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\7\ See e.g., supra n. 5 at 89 FR 79134 (``The applicability of
the BMA will depend on the facts and circumstances of the proposed
transaction. In addition to transactions that combine institutions
into a single legal entity through merger or consolidation, the
scope of merger transactions subject to approval under the BMA
encompasses transactions that take other forms, including purchase
and assumption transactions or other transactions that are mergers
in substance, and assumptions of deposits or other similar
liabilities.'').
\8\ See id. at 89 FR 79136.
\9\ See id. at 89 FR 79138.
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B. Summary of the Merger Policy Statement
The Merger Policy Statement was first published in 1998 and was
subsequently amended several times,\10\ most recently in 2008. The
Merger Policy Statement is essentially \11\ identical to the 2008
document. It includes a general introduction, followed by an overview
of application procedures, a discussion of the FDIC's evaluation of
merger applications based on the statutory factors required for
consideration under the BMA,\12\ and concludes with a list of related
considerations. The discussion of the BMA statutory factors addresses
the competitive factors, the prudential considerations related to
financial and managerial resources and future prospects, the
convenience and needs of the community to be served, and the
effectiveness of each insured depository institution involved in the
proposed merger transaction in combatting money-laundering activities.
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\10\ See supra n. 6.
\11\ The only changes are technical edits updating a room number
and a citation.
\12\ Supra n. 1.
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Although the Merger Policy Statement does not directly address the
BMA's statutory factor related to the risk to the stability of the
United States banking or financial system, which was added to the BMA
by the Dodd-Frank Act in 2010,\13\ the FDIC has articulated its
approach to evaluating this factor in the context of merger
transactions in the FDIC's Applications Procedures Manual.\14\
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\13\ 12 U.S.C. 1828(c)(5), as amended by Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010, Public Law 111-203,
604(f), 124 Stat. 1376, 1602 (2010).
\14\ See FDIC Applications Procedures Manual, pp. 4-22--4-23,
available at: <a href="https://www.fdic.gov/sites/default/files/2024-03/pr19111a.pdf">https://www.fdic.gov/sites/default/files/2024-03/pr19111a.pdf</a>. (``In evaluating a merger application, the FDIC must
consider the risk to the stability of the United States banking or
financial system (Section 18(c)(5) of the FDI Act). [The FDIC]
consider[s] both quantitative and qualitative metrics when
evaluating a transaction's impact on financial stability. The
following is a non-exhaustive list of quantitative metrics [the
FDIC] consider[s]: the size of the resulting firm; the availability
of substitute providers for any critical products and services
offered by the resulting firm; the interconnectedness of the
resulting firm with the banking or financial system; the extent to
which the resulting firm contributes to the complexity of the
financial system; and the extent of cross-border activities of the
resulting firm. In addition to these quantitative metrics,
qualitative factors should inform the evaluation of the financial
stability factor. Such factors include those that are indicative of
the relative degree of difficult in resolving the resulting firm,
such as the opaqueness and complexity of the resulting institution's
operations.'')
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III. Request for Comment
The FDIC seeks comment on the proposal to rescind the 2024
Statement and reinstate the Merger Policy Statement as an interim
measure. The FDIC plans to issue a future proposal to comprehensively
revise its merger policy at a later date, and will solicit further
comments at that time.
IV. Administrative Law Matters
In accordance with the requirements of the Paperwork Reduction Act
of 1995 (PRA),\15\ the FDIC may not conduct or sponsor, and the
respondent is not required to respond to, an information collection
unless it displays a currently valid Office of Management and Budget
(OMB) control number.
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\15\ 44 U.S.C. 3501 et seq.
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The Merger Policy Statement does not create any new or revise any
existing collections of information under the PRA. Therefore, no
information collection request will be submitted to the OMB for review.
V. Merger Policy Statement
The text of the Statement of Policy is as follows:
FDIC Statement of Policy on Bank Merger Transactions
I. Introduction
Section 18(c) of the Federal Deposit Insurance Act (12 U.S.C.
1828(c)), popularly known as the ``Bank Merger Act,'' requires the
prior written approval of the FDIC before any insured depository
institution may:
(1) Merge or consolidate with, purchase or otherwise acquire the
assets of, or assume any deposit liabilities of, another insured
depository institution if the resulting institution is to be a state
nonmember bank, or
(2) Merge or consolidate with, assume liability to pay any deposits
or similar liabilities of, or transfer assets and deposits to, a
noninsured bank or institution.
Institutions undertaking one of the above described ``merger
transactions'' must file an application with the FDIC. Transactions
that do not involve a transfer of deposit liabilities typically do not
require prior FDIC approval under the Bank Merger Act, unless the
transaction involves the acquisition of all or substantially all of an
institution's assets.
The Bank Merger Act prohibits the FDIC from approving any proposed
merger transaction that would result in a monopoly, or would further a
combination or conspiracy to monopolize or to attempt to monopolize the
business of banking in any part of the United States. Similarly, the
Bank Merger Act prohibits the FDIC from approving a proposed merger
transaction whose effect in any section of the country may be
substantially to lessen competition, or to tend to create a monopoly,
or which in any other manner would be in restraint of trade. An
exception may be made in the case of a merger transaction whose effect
would be to substantially lessen competition, tend to create a
monopoly, or otherwise restrain trade, if the FDIC finds 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. For example, the FDIC may approve a merger transaction to
prevent the probable failure of one of the institutions involved.
In every proposed merger transaction, the FDIC must also consider
the financial and managerial resources and future prospects of the
existing and proposed institutions, the convenience and needs of the
community to be served, and the effectiveness of each insured
depository institution involved in the proposed merger transaction in
combating money-laundering activities, including in overseas branches.
II. Application Procedures
1. Application filing. Application forms and instructions may be
obtained from the appropriate FDIC office. Completed applications and
any other pertinent materials should be filed with the appropriate FDIC
office. The application and related materials will be reviewed by the
FDIC for compliance with applicable laws and FDIC rules and
regulations. When all necessary information has been received, the
application will be processed and a decision rendered by the FDIC.
2. Expedited processing. Section 303.64 of the FDIC rules and
regulations (12 CFR 303.64) provides for expedited processing, which
the FDIC will grant to eligible applicants. In addition to the eligible
institution criteria provided for in Sec. 303.2 (12 CFR 303.2), Sec.
303.64 provides expedited processing criteria
[[Page 11681]]
specifically applicable to proposed merger transactions.
3. Publication of notice. The FDIC will not take final action on a
merger application until notice of the proposed merger transaction is
published in a newspaper or newspapers of general circulation in
accordance with the requirements of section 18(c)(3) of the Federal
Deposit Insurance Act. See Sec. 303.65 of the FDIC rules and
regulations (12 CFR 303.65). The applicant must furnish evidence of
publication of the notice to the appropriate FDIC office following
compliance with the publication requirement. See Sec. 303.7(b) of the
FDIC rules and regulations (12 CFR 303.7(b)).
4. Reports on competitive factors. As required by law, the FDIC
will request a report on the competitive factors involved in a proposed
merger transaction from the Attorney General This report must
ordinarily be furnished within 30 days, and the applicant upon request
will be given an opportunity to submit comments to the FDIC on the
contents of the competitive factors report.
5. Notification of the Attorney General. After the FDIC approves
any merger transaction, the FDIC will immediately notify the Attorney
General. Generally, unless it involves a probable failure, an emergency
exists requiring expeditious action, or it is solely between an insured
depository institution and one or more of its affiliates, a merger
transaction may not be consummated until 30 calendar days after the
date of the FDIC's approval. However, the FDIC may prescribe a 15-day
period, provided the Attorney General concurs with the shorter period.
6. Merger decisions available. Applicants for consent to engage in
a merger transaction may find additional guidance in the reported bases
for FDIC approval or denial in prior merger transaction cases compiled
in the FDIC's annual ``Merger Decisions'' report. Reports may be
obtained from the FDIC Public Information Center, 3501 North Fairfax
Drive, Room E-1005, Arlington, VA 22226. Reports may also be viewed at
<a href="http://www.fdic.gov">http://www.fdic.gov</a>.
III. Evaluation of Merger Applications
The FDIC's intent and purpose is to foster and maintain a safe,
efficient, and competitive banking system that meets the needs of the
communities served. With these broad goals in mind, the FDIC will apply
the specific standards outlined in this Statement of Policy when
evaluating and acting on proposed merger transactions.
Competitive Factors
In deciding the competitive effects of a proposed merger
transaction, the FDIC will consider the extent of existing competition
between and among the merging institutions, other depository
institutions, and other providers of similar or equivalent services in
the relevant product market(s) within the relevant geographic
market(s).
1. Relevant geographic market. The relevant geographic market(s)
includes the areas in which the offices to be acquired are located and
the areas from which those offices derive the predominant portion of
their loans, deposits, or other business. The relevant geographic
market also includes the areas where existing and potential customers
impacted by the proposed merger transaction may practically turn for
alternative sources of banking services. In delineating the relevant
geographic market, the FDIC will also consider the location of the
acquiring institution's offices in relation to the offices to be
acquired.
2. Relevant product market. The relevant product market(s) includes
the banking services currently offered by the merging institutions and
to be offered by the resulting institution. In addition, the product
market may also include the functional equivalent of such services
offered by other types of competitors, including other depository
institutions, securities firms, or finance companies. For example,
share draft accounts offered by credit unions may be the functional
equivalent of demand deposit accounts. Similarly, captive finance
companies of automobile manufacturers may compete directly with
depository institutions for automobile loans, and mortgage bankers may
compete directly with depository institutions for real estate loans.
3. Analysis of competitive effects. In its analysis of the
competitive effects of a proposed merger transaction, the FDIC will
focus particularly on the type and extent of competition that exists
and that will be eliminated, reduced, or enhanced by the proposed
merger transaction. The FDIC will also consider the competitive impact
of providers located outside a relevant geographic market where it is
shown that such providers individually or collectively influence
materially the nature, pricing, or quality of services offered by the
providers currently operating within the geographic market.
The FDIC's analysis will focus primarily on those services that
constitute the largest part of the businesses of the merging
institutions. In its analysis, the FDIC will use whatever analytical
proxies are available that reasonably reflect the dynamics of the
market, including deposit and loan totals, the number and volume of
transactions, contributions to net income, or other measures.
Initially, the FDIC will focus on the respective shares of total
deposits \16\ held by the merging institutions and the various other
participants with offices in the relevant geographic market(s), unless
the other participants' loan, deposit, or other business varies
markedly from that of the merging institutions. Where it is clear,
based on market share considerations alone, that the proposed merger
transaction would not significantly increase concentration in an
unconcentrated market, a favorable finding will be made on the
competitive factor.
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\16\ In many cases, total deposits will adequately serve as a
proxy for overall share of the banking business in the relevant
geographic market(s); however, the FDIC may also consider other
analytical proxies.
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Where the market shares of the merging institutions are not clearly
insignificant, the FDIC will also consider the degree of concentration
within the relevant geographic market(s) using the Herfindahl-Hirschman
Index (HHI) \17\ as a primary measure of market concentration. For
purposes of this test, a reasonable approximation for the relevant
geographic market(s) consisting of one or more predefined areas may be
used. Examples of such predefined areas include counties, the Bureau of
the Census Metropolitan-Statistical Areas (MSAs), or Rand-McNally
Ranally Metro Areas (RMAs).
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\17\ The 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: 100\2\ = 10,000: for a market with five
competitors with equal market shares, the HHI would be: 20\2\ +
20\2\ + 20\2\ + 20\2\ + 20\2\ = 2,000.
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The FDIC normally will not deny a proposed merger transaction on
antitrust grounds (absent objection from the Department of Justice)
where the post-merger HHI in the relevant geographic market(s) is 1,800
points or less or, if it is more than 1,800, it reflects an increase of
less than 200 points from the pre-merger HHI. Where a proposed merger
transaction fails this initial concentration test, the FDIC will
consider more closely the various competitive dynamics at work in the
market, taking into account a variety of factors that may be especially
relevant and important in a particular proposal, including:
[[Page 11682]]
<bullet> The number, size, financial strength, quality of
management, and aggressiveness of the various participants in the
market;
<bullet> The likelihood of new participants entering the market
based on its attractiveness in terms of population, income levels,
economic growth, and other features;
<bullet> Any legal impediments to entry or expansion; and
<bullet> Definite entry plans by specifically identified entities.
In addition, the FDIC will consider the likelihood that new
entrants might enter the market by less direct means; for example,
electronic banking with local advertisement of the availability of such
services. This consideration will be particularly important where there
is evidence that the mere possibility of such entry tends to encourage
competitive pricing and to maintain the quality of services offered by
the existing competitors in the market.
The FDIC will also consider the extent to which the proposed merger
transaction likely would create a stronger, more efficient institution
able to compete more vigorously in the relevant geographic markets.
4. Consideration of the public interest. The FDIC will deny any
proposed merger transaction whose overall effect likely would be to
reduce existing competition substantially by limiting the service and
price options available to the public in the relevant geographic
market(s), unless the anticompetitive effects of the proposed merger
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. For this purpose, the applicant must
show by clear and convincing evidence that any claimed public benefits
would be both substantial and incremental and generally available to
seekers of banking services in the relevant geographic market(s) and
that the expected benefits cannot reasonably be achieved through other,
less anticompetitive means.
Where a proposed merger transaction is the least costly alternative
to the probable failure of an insured depository institution, the FDIC
may approve the merger transaction even if it is anticompetitive.
Prudential Factors
The FDIC does not wish to create larger weak institutions or to
debilitate existing institutions whose overall condition, including
capital, management, and earnings, is generally satisfactory.
Consequently, apart from competitive considerations, the FDIC normally
will not approve a proposed merger transaction where the resulting
institution would fail to meet existing capital standards, continue
with weak or unsatisfactory management, or whose earnings prospects,
both in terms of quantity and quality, are weak, suspect, or doubtful.
In assessing capital adequacy and earnings prospects, particular
attention will be paid to the adequacy of the allowance for loan and
lease losses. In evaluating management, the FDIC will rely to a great
extent on the supervisory histories of the institutions involved and of
the executive officers and directors that are proposed for the
resultant institution. In addition, the FDIC may review the adequacy of
management's disclosure to shareholders of the material aspects of the
merger transaction to ensure that management has properly fulfilled its
fiduciary duties.
Convenience and Needs Factor
In assessing the convenience and needs of the community to be
served, the FDIC will consider such elements as the extent to which the
proposed merger transaction is likely to benefit the general public
through higher lending limits, new or expanded services, reduced
prices, increased convenience in utilizing the services and facilities
of the resulting institution, or other means. The FDIC, as required by
the Community Reinvestment Act, will also note and consider each
institution's Community Reinvestment Act performance evaluation record.
An unsatisfactory record may form the basis for denial or conditional
approval of an application.
Anti-Money Laundering Record
In every case, the FDIC will take into consideration the
effectiveness of each insured depository institution involved in the
proposed merger transaction in combating money-laundering activities,
including in overseas branches. In this regard, the FDIC will consider
the adequacy of each institution's programs, policies, and procedures
relating to anti-money laundering activities; the relevant supervisory
history of each participating institution, including their compliance
with anti-money laundering laws and regulations; and the effectiveness
of any corrective program outstanding. The FDIC's assessment may also
incorporate information made available to the FDIC by the Department of
the Treasury, other Federal or State authorities, and/or foreign
governments. Adverse findings may warrant correction of identified
problems before consent is granted, or the imposition of conditions.
Significantly adverse findings in this area may form the basis for
denial of the application.
Special Information requirement if applicant is affiliated with or
will be affiliated with an insurance company.
If the institution that is the subject of the application is, or
will be, affiliated with a company engaged in insurance activities that
is subject to supervision by a state insurance regulator, the applicant
must submit the following information as part of its application: (1)
The name of insurance company; (2) a description of the insurance
activities that the company is engaged in and has plans to conduct; and
(3) a list of each state and the lines of business in that state which
the company holds, or will hold, an insurance license. Applicant must
also indicate the state where the company holds a resident license or
charter, as applicable.
IV. Related Considerations
1. Interstate bank merger transactions. Where a proposed
transaction is an interstate merger transaction between insured banks,
the FDIC will consider the additional factors provided for in section
44 of the Federal Deposit Insurance Act, 12 U.S.C. 1831u.
2. Interim merger transactions. An interim institution is a state-
or federally-chartered institution that does not operate independently,
but exists, normally for a very short period of time, solely as a
vehicle to accomplish a merger transaction. In cases where the
establishment of a new or interim institution is contemplated in
connection with a proposed merger transaction, the applicant should
contact the FDIC to discuss any relevant deposit insurance
requirements. In general, a merger transaction (other than a purchase
and assumption) involving an insured depository institution and a
federal interim depository institution will not require an application
for deposit insurance, even if the federal interim depository
institution will be the surviving institution.
3. Branch closings. Where banking offices are to be closed in
connection with the proposed merger transaction, the FDIC will review
the merging institutions' conformance to any applicable requirements of
section 42 of the FDI Act concerning notice of branch closings as
reflected in the Interagency Policy Statement Concerning Branch Closing
Notices and Policies. See 64 FR 34844 (Jun. 29, 1999).
4. Legal fees and other expenses. The commitment to pay or payment
of unreasonable or excessive fees and other expenses incident to an
application reflects adversely upon the management of the applicant
institution. The FDIC
[[Page 11683]]
will closely review expenses for professional or other services
rendered by present or prospective board members, major shareholders,
or other insiders for any indication of self-dealing to the detriment
of the institution. As a matter of practice, the FDIC expects full
disclosure to all directors and shareholders of any arrangement with an
insider. In no case will the FDIC approve an application where the
payment of a fee, in whole or in part, is contingent upon any act or
forbearance by the FDIC or by any other federal or state agency or
official.
5. Trade names. Where an acquired bank or branch is to be operated
under a different trade name than the acquiring bank, the FDIC will
review the adequacy of the steps taken to minimize the potential for
customer confusion about deposit insurance coverage. Applicants may
refer to the Interagency Statement on Branch Names for additional
guidance. See FDIC, Financial Institution Letter, 46-98 (May 1, 1998).
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on March 3, 2025.
Jennifer M. Jones
Deputy Executive Secretary.
[FR Doc. 2025-03832 Filed 3-10-25; 8:45 am]
BILLING CODE 6714-01-P
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</html>Indexed from Federal Register on March 11, 2025.
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