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Remarks by James I. Anderson, Deputy General Counsel, FDIC, on Merger Policies of the Federal Banking Agencies before the Subcommittee on Financial Institutions and Monetary Policy Committee on Financial Services, U.S. House of Representatives
Introduction
Chairman Barr, Ranking Member Foster, and members of the Subcommittee, thank you for the opportunity to appear today to discuss the Federal Deposit Insurance Corporation’s (FDIC) role in bank merger transactions. My testimony today will summarize the statutory framework under which the FDIC evaluates bank merger transactions, the current merger application submission and review process, and finally, recently proposed updates to the FDIC’s Statement of Policy (Proposed SOP) on bank merger transactions.
Statutory Framework
The FDIC is one of three federal banking agencies with responsibility for evaluating transactions subject to the Bank Merger Act (BMA). Section 18(c) of the Federal Deposit Insurance Act (FDI Act), which codifies the BMA, prohibits an insured depository institution (IDI) from engaging in a merger transaction without regulatory approval. The FDIC has jurisdiction to act on transactions that involve IDIs in which the acquiring, assuming, or resulting institution is an FDIC-supervised institution. The FDIC also has jurisdiction to act on merger applications that involve an IDI and any non-insured entity, notwithstanding the IDI’s charter.
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