The Justice Department recently updated its nearly 30-year-old bank merger guidelines.
According to the updated guidance issued Sept. 17, mergers including banks with branch overlaps in a geographic area or services and products used by competing banks could trigger competitive analysis.
According to the DOJ, the previous guidelines, issued in 1995, include analysis that no longer accurately depicts how the Antitrust Division reviews bank mergers. In June 2023, Department of Justice Assistant Attorney General Jonathan Kanter announced the DOJ would expand its M&A competitive review process to include fees, interest rates, branch locations and the potential to further consolidate power in an already dominant bank.
The DOJ’s analysis was done in collaboration with the Federal Reserve, FDIC and Office of the Comptroller of the Currency. The announcement came the same day as the OCC and FDIC finished updating their merger guidelines. The OCC ended the possibility of merger applications being approved based solely on the passage of time while adding transparency to standards consistent with merger approvals and denials under the Bank Merger Act.
The FDIC’s updated guidance applies closer scrutiny to mergers resulting in a bank with more than $100 billion in assets. The updated standards also clarify that the FDIC expects a merger will allow the resulting bank to better meet community needs.
