FDIC refutes CFPB’s bank merger policy announcement

On December 9, the FDIC issued a statement refuting a request for review of bank merger policies announced in a CFPB blog post. According to a joint statement issued by FDIC Board member Martin J. Gruenberg and Rohit Chopra (who has an automatic board seat as Director of the CFPB), the FDIC Board of Directors voted to launch a public comment period on updating the FDIC’s regulatory implementation of the Bank Merger Act. Gruenberg and Chopra indicated that the Board members taking part in this action have approved a Request for Information and Comment on Rules, Regulations, Guidance, and Statements of Policy Regarding Bank Merger Transactions, which would seek public input on the FDIC’s approach to considering prudential factors in acting on a bank merger application, specifically related to “whether bright line minimum standards for prudential factors should be established, and if so, what minimum standards for which prudential factors.” In his blog post, Chopra noted that the Bureau is particularly interested in how the assessment of a bank merger’s impact on families and businesses in local communities would work in practice, and how should regulators ensure a merger does not increase the risk of bank failure or otherwise disrupt the economy should the bank face financial distress. According to the Gruenberg and Chopra joint statement, the Board’s action authorizes the FDIC’s executive secretary to publish the RFI in the Federal Register, upon which a 60-day window for comments will commence.

Shortly following the release of the joint statement, the FDIC released a statement disputing that any action had been approved, stressing that it “has longstanding internal policies and procedures for circulating and conducting votes of its Board of Directors, and for issuing documents for publication in the Federal Register.” Adding that “[i]n this case, there was no valid vote by the Board, and no such request for information and comment has been approved by the agency for publication in the Federal Register,” the FDIC commented that “[n]otwithstanding the actions taken today, the FDIC expects this time-honored tradition of collegiality and comity to continue.”

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