On May 8, 2025, the U.S. Office of the Comptroller of the Currency (OCC) announced an interim final rule reinstating automatic approvals for certain bank mergers after a designated period, effectively reversing a 2024 policy that had imposed more rigorous scrutiny on mergers involving banks with over $50 billion in assets. (reuters.com)

This policy change marks a return to a more expedited merger approval process, aligning with the current administration's deregulatory agenda. The 2024 policy had eliminated expedited reviews and introduced comprehensive guidelines for evaluating mergers, particularly those involving banks with assets exceeding $50 billion. The banking industry had criticized the previous policy for potentially discouraging legitimate mergers. Acting Comptroller Rodney Hood emphasized that the updated framework aims to reduce regulatory burdens while maintaining effective oversight. (reuters.com)

Background on the OCC and Its Role

The OCC, an independent bureau within the U.S. Department of the Treasury, charters, regulates, and supervises national banks and federal savings associations to ensure their safe and sound operation. (occ.gov)

Details of the 2024 Policy

In September 2024, under the Biden administration, the OCC implemented a policy that removed expedited review procedures and introduced a policy statement outlining factors for evaluating bank mergers. This policy aimed to enhance transparency and oversight, focusing on financial stability, managerial and financial resources, and community needs. (occ.gov)

Reversal to Previous Framework

The interim final rule announced on May 8, 2025, effectively reinstates the pre-2024 framework, which includes automatic approvals for certain bank mergers after a designated period. This move aligns with the administration's efforts to reduce governmental intervention in the private sector, aiming to spur economic growth. (reuters.com)

Industry and Public Response

The banking sector had opposed the 2024 policy, arguing that it could discourage or disqualify legitimate mergers. The American Bankers Association (ABA) urged the OCC to withdraw the proposal to end automatic approvals, stating that it would be a change not based on any evidence of increased risk or result in any increased benefits. (bankingjournal.aba.com)

Some consumer advocacy groups and lawmakers have expressed concerns that the rollback of the 2024 policy could lead to less scrutiny of large bank mergers, potentially resulting in reduced competition and negative impacts on consumers. (ft.com)

Implications

• For the Banking Industry: The reinstatement of automatic approvals and reduced regulatory burdens may encourage more merger activity among banks, particularly those seeking to expand their market presence or achieve economies of scale.

• For Consumers: While proponents argue that streamlined mergers can lead to more efficient banking services, critics warn that reduced oversight could result in decreased competition, higher fees, and fewer choices for consumers.

• For Regulatory Oversight: The shift back to a less stringent review process raises questions about the balance between promoting economic growth and ensuring financial stability and consumer protection.

Conclusion

The OCC's decision to streamline the bank merger review process reflects a significant policy shift with potential far-reaching implications for the banking industry, consumers, and regulatory oversight. As the financial landscape continues to evolve, stakeholders will closely monitor the effects of this regulatory change on market dynamics and consumer welfare.