# FDIC FIL-13-2025: Statement of Policy on Bank Merger Transactions: Rescission and Reinstatement

> Federal · Agency guidance · In force

URL: https://www.frixlaw.com/law-library/statutes/FDIC_FIL25013

## Section

- **Citation:** FDIC FIL-13-2025
- **Heading:** Statement of Policy on Bank Merger Transactions: Rescission and Reinstatement
- **Jurisdiction:** Federal
- **Kind:** Agency guidance
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** FDIC Financial Institution Letters / Statement of Policy on Bank Merger Transactions: Rescission and Reinstatement

## Text

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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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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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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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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29417
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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## Nearby sections

- [FDIC FIL-1-2002 FOREIGN ASSETS CONTROL ACT](https://www.frixlaw.com/law-library/statutes/FDIC_FIL02001.md)
- [FDIC FIL-1-2010 Employee Compensation Advance Notice of Proposed Rulemaking](https://www.frixlaw.com/law-library/statutes/FDIC_FIL10001.md)
- [FDIC FIL-1-2024 Consolidated Reports of Condition and Income for Fourth Quarter 2023](https://www.frixlaw.com/law-library/statutes/FDIC_FIL24001.md)
- [FDIC FIL-2-2004 Foreign Assets Control Act](https://www.frixlaw.com/law-library/statutes/FDIC_FIL04002.md)
- [FDIC FIL-2-2020 Consolidated Reports of Condition and Income for Fourth Quarter 2019](https://www.frixlaw.com/law-library/statutes/FDIC_FIL20002.md)
- [FDIC FIL-3-2003 FILING PROCEDURES](https://www.frixlaw.com/law-library/statutes/FDIC_FIL03003.md)
- [FDIC FIL-4-2006 Commercial Real Estate Lending Proposed Interagency Guidance](https://www.frixlaw.com/law-library/statutes/FDIC_FIL06004.md)
- [FDIC FIL-4-2021 Revised Guidelines for Appeals of Material Supervisory Determinations](https://www.frixlaw.com/law-library/statutes/FDIC_FIL21004.md)
- [FDIC FIL-4-2023 Guidance to Help Financial Institutions and Facilitate Recovery in Areas of California Affected by Severe Winter Storms, Flooding, Landslides and Mudslides](https://www.frixlaw.com/law-library/statutes/FDIC_FIL23004.md)
- [FDIC FIL-4-2025 FDIC Statement of Policy on Bank Merger Transactions](https://www.frixlaw.com/law-library/statutes/FDIC_FIL25004.md)
- [FDIC FIL-5-2000 Consumer Credit Reporting Practices](https://www.frixlaw.com/law-library/statutes/FDIC_FIL00005.md)
- [FDIC FIL-5-2003 LETTER TO STAKEHOLDERS](https://www.frixlaw.com/law-library/statutes/FDIC_FIL03005.md)
- [FDIC FIL-5-2021 Frequently Asked Questions Regarding Suspicious Activity Reporting and Other Anti-Money Laundering (AML) Considerations](https://www.frixlaw.com/law-library/statutes/FDIC_FIL21005.md)
- [FDIC FIL-6-2000 Special Alert](https://www.frixlaw.com/law-library/statutes/FDIC_FIL00006.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/FDIC_FIL25013. Check the current official text before relying on it. Not legal advice.