The Federal Deposit Insurance Corporation has proposed turning its bank merger review from a policy statement into a binding regulation with deadlines that run against the agency, not just the applicant. The FDIC board approved the proposal on Sept. 17, and it was published Sept. 22 at 91 FR 60196 (RIN 3064-AG18). Comments are due Nov. 23.
The practical stakes are speed and predictability for deals the FDIC reviews under the Bank Merger Act, chiefly those where the resulting bank is a state-chartered nonmember bank. Skadden counts roughly 2,700 such institutions among about 4,500 banks. The proposal also changes how competition is measured, which matters most in rural markets where a merger can look concentrated if credit unions are left out of the count.
1. What the proposal does
The core change is a set of processing tracks with clocks attached. An application is deemed “substantially complete” on receipt unless the FDIC flags gaps within 21 days. From that point, the clocks below apply.
| Track | Who qualifies | FDIC timeline |
|---|---|---|
| Rapid (de minimis) | Assets acquired below the HSR Act threshold and under 5% of the acquirer’s assets, or certain operating-subsidiary reorganizations; all parties well-rated and well-capitalized | Deemed approved five business days after a complete filing, subject to DOJ timing; no public comment period |
| Expedited: corporate reorganization | Affiliate-only deals meeting rating or size tests | Action within 30 days; 15-day comment period |
| Expedited: eligible institution | Eligible acquirer buying assets up to 25% of its own (now 10%) | Existing expedited track, wider eligibility |
| Standard | Resulting bank under $50 billion, no board-level or other-agency dependency | Written determination within 90 days (extendable to 180) |
| Standard: all other | Larger or more complex deals | Within 150 days (extendable to 270) |
To qualify for the rapid track, each institution must have a composite supervisory rating of 3 or better, a satisfactory or better CRA rating where applicable, a compliance rating of 1, 2 or 3, be well-capitalized, and not be under certain enforcement orders. The FDIC’s reasoning is that these deals “necessarily satisfy the statutory factors” by virtue of their size and the condition of the banks involved.
The proposal also replaces the current case-by-case test for a “merger in substance” with a bright line: acquiring 80% or more of another institution’s assets, directly or indirectly, over a rolling 12-month period.
2. The competition screen
Bank regulators screen mergers using the Herfindahl-Hirschman Index of deposit concentration in a local market. Today the FDIC’s initial screen counts deposits at banks and thrifts with local branches, generally weighting thrift deposits at 50%; credit unions are not in it. The proposal would add credit union shares and a representative portion of centrally booked deposits, the kind held by online banks without local branches.
Under the proposed rule, absent objection from the Attorney General, the FDIC would not deny a merger filing on competition grounds where: (1) the initial HHI screen in a relevant geographic market is 1,800 points or less after consummation of the merger transaction; (2) if the initial HHI screen is more than 1,800 after consummation of the merger transaction, the increase is less than 200 points from the HHI in a relevant geographic market prior to the merger transaction; or (3) the transaction is a corporate reorganization.
EXCERPT · FDIC, Merger Transactions, 91 FR 60196, Section III
Adding credit unions and online deposits to the denominator lowers measured concentration almost everywhere, so more deals fall inside the safe harbor. A separate financial stability safe harbor would cover deals where the target has less than $20 billion in assets and the resulting bank is not a G-SIB subsidiary or a Category II, III or IV institution.
Adding credit unions and online deposits to the denominator lowers measured concentration almost everywhere.
3. The case for and against
The FDIC argues the current framework relies partly on unpublished internal practice, and that a rule with fixed clocks gives applicants and the public a clearer picture of what will be approved and when. Its press release said the proposal would make review “faster, more predictable, and appropriately tailored.” Community banks seeking scale, and the investors who finance those deals, are the obvious beneficiaries.
The likeliest objections run the other way. Eliminating public comment for de minimis deals removes a channel community groups use to raise convenience-and-needs concerns. Credit unions may object to being counted as full competitors for antitrust purposes while operating under different charters and tax treatment. And deemed approval shifts the default: silence from the agency becomes a yes. The proposal’s own history shows how quickly this area swings. The FDIC adopted a new policy statement in 2024, proposed in March 2025 to rescind it and restore the 1998 version, and received 13 comments on that proposal. It now plans to rescind its policy statement when this rule becomes final.
4. What to watch
- Nov. 23, 2026: comment deadline. The release poses more than 100 numbered questions, including whether $50 billion and $20 billion are the right size thresholds.
- The other regulators. The rule covers only FDIC-reviewed deals. National bank mergers go to the OCC and state member bank deals to the Federal Reserve, and the Justice Department still reviews competitive effects.
- A final rule. The FDIC has not set a date. Rescission of the current policy statement would happen at the same time.
- Merger Transactions, Proposed Rule, 91 FR 60196 (2026-19308) — Federal Register · federalregister.gov
- FDIC Board of Directors approves proposed rule to modernize and reform the FDIC's framework for reviewing bank merger transactions — FDIC · fdic.gov
- Notice of Proposed Rulemaking: Merger Transactions (board document) — FDIC · fdic.gov
- FDIC issues proposal on bank merger transactions, signaling modernized approach to merger review — Skadden, Arps · skadden.com
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