Statement of Policy on Bank Merger Transactions: Rescission and Reinstatement

This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations

Federal Register

29413

Vol. 90, No. 126

Thursday, July 3, 2025

1 12 U.S.C. 1828(c).

2 12 U.S.C. 1828(c)(2).

3 12 U.S.C. 1828(c)(1).

4 90 FR 11679 (Mar. 11, 2025).

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).

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.

10 See supra n. 6.

11 The only changes are technical edits updating

a room number and a citation.

12 Supra n. 1.

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: Final rescission and

reinstatement of statement of policy.

SUMMARY: The FDIC is taking final

action to rescind the Statement of Policy

on Bank Merger Transactions published

in 2024 (2024 Statement of Policy) and

reinstate its Statement of Policy on Bank

Merger Transactions that was in effect

prior to the 2024 Statement of Policy

(Bank Merger Statement of Policy)

rporation (FDIC).

ACTION: Final rescission and

reinstatement of statement of policy.

SUMMARY: The FDIC is taking final

action to rescind the Statement of Policy

on Bank Merger Transactions published

in 2024 (2024 Statement of Policy) and

reinstate its Statement of Policy on Bank

Merger Transactions that was in effect

prior to the 2024 Statement of Policy

(Bank Merger Statement of Policy). The

reinstated Bank Merger Statement of

Policy will remain in effect pending the

FDIC’s review of all aspects of the

regulatory framework governing the

FDIC’s review of merger transactions in

connection with a future proposal to

comprehensively revise its merger

policy.

DATES: This Bank Merger Statement of

Policy supersedes the 2024 Statement of

Policy, effective on August 4, 2025.

FOR FURTHER INFORMATION CONTACT:

Division of Risk Management

Supervision: Thomas F. Lyons,

Associate Director of Risk Management

Policy, (202) 898–6850, tlyons@fdic.gov;

Ryan C. Senegal, Chief, Policy and

Program Development, (980) 249–3863,

rsenegal@fdic.gov; George J. Small,

Senior Examination Specialist, (347)

267–2453, gsmall@fdic.gov. Legal

Division: Annmarie Boyd, Assistant

General Counsel, (202) 898–3714,

aboyd@fdic.gov; Nicholas A. Simons,

Counsel, (202) 898–6785, nsimons@

fdic.gov.

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 merger transaction

except with the prior approval of the

responsible 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

On March 11, 2025, the FDIC

published a request for comment 4 in the

Federal Register on a proposal to

res

er

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

On March 11, 2025, the FDIC

published a request for comment 4 in the

Federal Register on a proposal to

rescind the 2024 Statement of Policy

issued on September 27, 2024 5 and to

reinstate the FDIC’s prior Bank Merger

Statement of Policy, which was initially

adopted in 1998 and amended most

recently in 2008.6

Having considered the comments

received, the FDIC Board of Directors is

rescinding the 2024 Statement of Policy

and reinstating the Bank Merger

Statement of Policy as described in this

SUPPLEMENTARY INFORMATION.

II. Overview of the Proposal

A. Purpose

The FDIC proposed to rescind the

2024 Statement of Policy and reinstate

the Bank Merger Statement of Policy

due to concerns that the 2024 Statement

of Policy added considerable

uncertainty to the merger application

process and raised additional questions

regarding when merger applications

would be required.7 The 2024 Statement

of Policy also deemphasized the use of

the Herfindahl-Hirschman Index (HHI)

thresholds in the competitive effects

analysis, which had long served as a

predictable proxy for determining

whether a proposed transaction is

anticompetitive,8 and replaced those

thresholds with more subjective criteria

dditional questions

regarding when merger applications

would be required.7 The 2024 Statement

of Policy also deemphasized the use of

the Herfindahl-Hirschman Index (HHI)

thresholds in the competitive effects

analysis, which had long served as a

predictable proxy for determining

whether a proposed transaction is

anticompetitive,8 and replaced those

thresholds with more subjective criteria.

In addition, the 2024 Statement of

Policy placed an affirmative burden on

applicants to demonstrate that a merger

transaction would 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 would evaluate this factor.9

There were also concerns that the 2024

Statement of Policy made the FDIC’s

merger review process less transparent

and predictable and left prospective

applicants unclear about the prospects

for approval and the resources and time

necessary to complete the merger

application process. Based on these

concerns, in March of 2025, the FDIC

proposed a return to its historical

approach by seeking comment on the

reinstatement of the prior Bank Merger

Statement of Policy, which is well-

understood by the public and market

participants. Reinstatement of the Bank

Merger Statement of Policy would serve

as an interim measure while the agency

develops future policy regarding merger

transactions.

B. Summary of the Merger Policy

Statement

The Bank Merger Statement of Policy

was first published in 1998 and was

subsequently amended several times

without public comment,10 most

recently in 2008. The Bank Merger

Statement of Policy being reinstated is

essentially 11 identical to the 2008

document

an interim measure while the agency

develops future policy regarding merger

transactions.

B. Summary of the Merger Policy

Statement

The Bank Merger Statement of Policy

was first published in 1998 and was

subsequently amended several times

without public comment,10 most

recently in 2008. The Bank Merger

Statement of Policy being reinstated 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 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

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Federal Register / Vol. 90, No. 126 / Thursday, July 3, 2025 / Rules and Regulations

13 12 U.S.C. 1828(c)(5), as amended by Dodd-

Frank Wall Street Reform and Consumer Protection

Act of 2010, Pub. L. 111–203, section 604(f), 124

Stat. 1376, 1602 (2010).

14 See FDIC Applications Procedures Manual, pp.

4–22—4–23, available at: https://www.fdic.gov/

sites/default/files/2024-03/pr19111a.pdf. (‘‘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

pp.

4–22—4–23, available at: https://www.fdic.gov/

sites/default/files/2024-03/pr19111a.pdf. (‘‘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.’’)

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 IDI involved in the

proposed merger transaction in

combatting money-laundering activities.

Although the Bank Merger Statement

of Policy 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

III

the Bank Merger Statement

of Policy 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

III. Summary and Discussion of

Comments

The FDIC received 12 comment letters

from 10 commenters on its proposal to

rescind the 2024 Statement of Policy

and reinstate the Bank Merger Statement

of Policy. Two of the commenters sent

two letters each writing separately first

to request an extension of the comment

period and then to discuss the proposal.

Commenters included academics,

advocacy groups, trade associations, and

an individual.

A. Request for Extension of the

Comment Period

Four commenters requested an

extension of the 30-day comment period

to allow for additional time for more

robust public feedback. The FDIC

decided not to extend the comment

period given the extensive consideration

of, and public feedback on, the 2024

Statement of Policy, which centered on

the same issues. The FDIC desires to

provide greater clarity for applicants in

a timely manner as to how the FDIC

would consider the BMA statutory

factors in the context of a merger

application, and reinstatement of the

prior Bank Merger Statement of Policy

supports this objective as it is well-

understood by the public and market

participants.

B. Comments on the Proposal To

Rescind the 2024 Statement of Policy

and Reinstate the Bank Merger

Statement of Policy

Five commenters supported the

proposed rescission of the 2024

Statement of Policy and the

reinstatement of the Bank Merger

Statement of Policy, and five

commenters were opposed

icy

supports this objective as it is well-

understood by the public and market

participants.

B. Comments on the Proposal To

Rescind the 2024 Statement of Policy

and Reinstate the Bank Merger

Statement of Policy

Five commenters supported the

proposed rescission of the 2024

Statement of Policy and the

reinstatement of the Bank Merger

Statement of Policy, and five

commenters were opposed. Commenters

who supported rescission and

reinstatement objected to certain aspects

of the 2024 Statement of Policy and

noted IDIs’ familiarity and experience

with the Bank Merger Statement of

Policy. For example, one commenter

believed that the 2024 Statement of

Policy introduced uncertainty and

subjectivity into the merger review

process that potentially deterred

beneficial transactions and appropriate

corporate reorganizations. This

commenter believed that reinstatement

of the Bank Merger Statement of Policy

would help restore clarity and

predictability for these transactions.

Another commenter considered it a

prudent measure for the FDIC to return

to the previous, well-understood

framework for reviewing merger

transactions as an interim measure

while it considered more

comprehensive revisions to its merger

policy. All five commenters in support

of rescission and reinstatement also

generally supported a comprehensive

review of the FDIC’s evaluation of

merger transactions.

Commenters who opposed the

proposal generally expressed support

for the 2024 Statement of Policy and

stated that rescission would be

regressive, counterproductive, and

unnecessary. These commenters stated

that the 2024 Statement of Policy

provided more clarity regarding

considerations that are not addressed in

the Bank Merger Statement of Policy,

including for example, the community

and economic impacts of branch

closures and the FDIC’s adjudication of

a merger application under the financial

stability factor

ould be

regressive, counterproductive, and

unnecessary. These commenters stated

that the 2024 Statement of Policy

provided more clarity regarding

considerations that are not addressed in

the Bank Merger Statement of Policy,

including for example, the community

and economic impacts of branch

closures and the FDIC’s adjudication of

a merger application under the financial

stability factor. Commenters who

opposed reinstatement of the Bank

Merger Statement of Policy also

generally supported the 2024 Statement

of Policy’s treatment of the convenience

and needs statutory factor, as well as the

FDIC’s expectations regarding public

hearings for transactions where the

resultant institution would have total

assets of $50 billion or more, heightened

financial stability standards for merger

transactions where the resultant

institution would have total assets of

$100 billion or more, and references to

community benefit agreements.

As discussed previously in this

SUPPLEMENTARY INFORMATION section, the

FDIC believes that the 2024 Statement of

Policy has added considerable

uncertainty to the merger application

process. Accordingly, and in view of the

comments received in support of the

proposal, the FDIC believes it would be

appropriate and beneficial to the public

to rescind the 2024 Statement of Policy

and reinstate the long-standing Bank

Merger Statement of Policy that is both

more familiar to, and better understood

by, key stakeholders in the merger

application process.

C. Comments Regarding Future Review

of Merger Policy

Several commenters made

recommendations to the FDIC in the

context of its future review of the

agency’s merger policy, including

ensuring closer adherence to the

statutory criteria, reducing automatic

bars to approval based on supervisory

ratings alone, promoting greater

interagency coordination, providing

concrete timelines for approval, and

improving transparency

iew

of Merger Policy

Several commenters made

recommendations to the FDIC in the

context of its future review of the

agency’s merger policy, including

ensuring closer adherence to the

statutory criteria, reducing automatic

bars to approval based on supervisory

ratings alone, promoting greater

interagency coordination, providing

concrete timelines for approval, and

improving transparency. Commenters

also urged consideration of a

streamlined application process for

certain transactions based on their size

or nature, such as internal

reorganizations or transfers involving a

small number of deposits. Other

commenters recommended

implementing a de minimis exception

for mergers of small IDIs in rural

markets, modernizing the competitive

effects analysis to consider competition

from nonbanks and financial services

firms, re-evaluating how the FDIC

utilizes Summary of Deposits data when

measuring market concentration, and

ensuring closer coordination with State

regulators. These comments will be

considered, and the FDIC will seek

additional public comments, in

connection with a future proposal to

comprehensively revise merger policy.

IV. Administrative Law Matters

A. Executive Order 12866

Executive Order 12866, as amended

by Executive Order 14215, directs

certain agencies to assess costs and

benefits of significant regulatory actions

and to select regulatory approaches that

maximize net benefits (including

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utive Order 12866

Executive Order 12866, as amended

by Executive Order 14215, directs

certain agencies to assess costs and

benefits of significant regulatory actions

and to select regulatory approaches that

maximize net benefits (including

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Federal Register / Vol. 90, No. 126 / Thursday, July 3, 2025 / Rules and Regulations

15 44 U.S.C. 3501 et seq.

potential economic, environmental,

public health and safety effects,

distributive impacts, and equity).

Pursuant to section 3(f) of Executive

Order 12866, the Office of Information

and Regulatory Affairs within the Office

of Management and Budget has

determined that the rescission of the

2024 Statement of Policy and the

reinstatement of the FDIC’s Bank Merger

Statement of Policy that was in effect

prior to 2024 is a ‘‘significant regulatory

action.’’

B. Paperwork Reduction Act

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.

The Bank Merger Statement of Policy

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. Bank Merger Statement of Policy

The text of the Bank Merger 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:

r review.

V. Bank Merger Statement of Policy

The text of the Bank Merger 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

n 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

e.

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 § 303.2 (12 CFR 303.2), § 303.64

provides expedited processing criteria

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

§ 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 § 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

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 https://www.fdic.gov.

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

at https://www.fdic.gov.

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

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Federal Register / Vol. 90, No. 126 / Thursday, July 3, 2025 / Rules and Regulations

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.

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: 1002 = 10,000: for a

market with five competitors with equal market

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

+ 202 = 2,000.

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

qual market

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

+ 202 = 2,000.

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

tomobile 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.

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

cantly increase concentration in

an unconcentrated market, a favorable

finding will be made on the competitive

factor.

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).

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:

• The number, size, financial

strength, quality of management, and

aggressiveness of the various

participants in the market;

• The likelihood of new participants

entering the market based on its

attractiveness in terms of population,

income levels, economic growth, and

other features;

• Any legal impediments to entry or

expansion; and

• 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

ms of population,

income levels, economic growth, and

other features;

• Any legal impediments to entry or

expansion; and

• 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

ally 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,

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Federal Register / Vol. 90, No. 126 / Thursday, July 3, 2025 / Rules and Regulations

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

IC 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

ing

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

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

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

of the applicant institution. The FDIC

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 May 20, 2025.

Jennifer M. Jones,

Deputy Executive Secretary.

[FR Doc. 2025–12493 Filed 7–2–25; 8:45 am]

BILLING CODE 6714–01–P

DEPARTMENT OF COMMERCE

Economic Development Administration

13 CFR Part 302

[Docket No.: 250626–0114]

RIN 0610–AA87

Amendment to Environment

Regulation

AGENCY: Economic Development

Administration, U.S. Department of

Commerce.

ACTION: Final rule.

SUMMARY: Through this final rule, the

Economic Development Administration

(EDA), U.S. Department of Commerce, is

amending its environmental regulation.

Amending this regulation is necessary

to remove references to the Council on

Environmental Quality (CEQ)’s National

Environmental Policy Act (NEPA)

implementing regulations, which CEQ

has rescinded, and to clarify EDA

internal staffing of Environmental

Officers.

DATES: This rule is effective July 3,

2025

tion

(EDA), U.S. Department of Commerce, is

amending its environmental regulation.

Amending this regulation is necessary

to remove references to the Council on

Environmental Quality (CEQ)’s National

Environmental Policy Act (NEPA)

implementing regulations, which CEQ

has rescinded, and to clarify EDA

internal staffing of Environmental

Officers.

DATES: This rule is effective July 3,

2025.

FOR FURTHER INFORMATION CONTACT:

Jeffrey Roberson, Chief Counsel, Office

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