In a move designed to facilitate bank merger activity, the U.S. Office of the Comptroller of the Currency (OCC) is seeking to restore expedited merger reviews by scrapping a rule adopted last year eliminating the practice.
The regulator issued an interim rule on Thursday for public comment that restores its streamlined application and review process under the Bank Merger Act, which governs its review of proposed mergers involving national banks and federal savings associations. It also rescinded a policy statement that was issued last year on its review of proposed bank mergers.
Last fall, the OCC adopted a rule that scrapped the expedited review procedures, ostensibly in an effort to improve the transparency of the merger approval process.
It also adopted policy guidance that set out the general principles that the regulator considers when assessing a proposed deal, including how it considers financial stability, financial and managerial resources and future prospects, among other considerations.
Those policies took effect on Jan. 1. Now, the OCC is issuing a new rule to turn back the clock and reinstate the expedited review process, in an effort “to reduce the burden and uncertainty that the 2024 rule added to the application process.”
In its proposal, the regulator said that it is “aware that the release of the policy statement generated confusion and generally did not succeed in providing additional clarity to banks or the public.”
It also indicated that the banking industry has been unwilling to pursue deals in this environment.
As a result, it now believes that rescinding these policies will expedite merger reviews and decrease uncertainty for both the industry and the public.
“The OCC’s goal is to encourage economically beneficial mergers to support the U.S. economy and innovation. Rescission of the policy statement supports these goals by removing the outstanding confusion and uncertainty,” it said.
The proposals will be out for a 30-day comment period once they are published in the Federal Register.
“The OCC’s actions today reduce burden and uncertainty for banks and supports a regulatory framework for bank mergers that is effective and not excessive,” said Rodney Hood, acting comptroller of the currency, in a release.
“Making it easier for well-managed and well-capitalized banks to merge promotes competition and facilitates economic growth and innovation,” he added.