New OCC Bank Merger Act (BMA) Guide | Nelson Mullins Riley & Scarborough LLP

The Office of the Comptroller of the Currency (OCC) has issued guidance regarding planned changes to the Bank Merger Act (BMA). The new rule:

• It clearly adds financial stability This reflects growing concerns about the potential risks from mergers involving large or systemically important banks as an important factor in evaluating mergers. This is in line with post-2008 financial reforms aimed at addressing “too big to fail” concerns.
• Introducing the framework Enhanced review for larger, more complex mergers. This change responds to growing concerns about the concentration of assets in a small number of institutions and the potential systemic impact of such mergers.
• Place more emphasis on assessing anti-competitive effects as part of its merger review process. The rules formalize greater coordination with the Department of Justice, allowing for more in-depth consideration of competition issues at the regulatory level.
• Strengthens public participation By extending comment periods and increasing “transparency” in the process, the OCC has made it easier for the public to submit comments and has committed to considering those comments more carefully, especially when mergers could impact local communities.
• Emphasizes CRA compliance and the impact of mergers on community amenity and needs underserved or low-income communitiesThis brings the CRA into sharper focus in merger reviews, while allowing the OCC to pay greater attention to how mergers could impact financial inclusion and community banking access.
• Contains certain provisions protect consumersreviewing the potential negative impacts of mergers on consumers, such as higher wages, reduced services or reduced access to banking. This represents a shift towards balancing business interests with consumer rights.

These changes could extend the already lengthy application process under the Bank Merger Law and also provide additional opportunities for public objections to bank mergers.

Unfortunately, the Rule does not provide clear standards applicable to each of these items and instead provides broader policy statements covering a wide range of issues that regulators may consider when making bank merger decisions.

The Final Rules and Policy Statement are available at: https://www.occ.gov/news-issuances/federal-register/2024/nr-occ-2024-101a-federal-register.pdf.

“This final rule and policy statement provide clarity and transparency in the OCC’s evaluation of bank mergers to improve outcomes that benefit communities, increase competition, and support a diverse banking system,” said Interim Supervisor Hsu.