On September 17, the FDIC’s Board of Directors approved a notice of proposed rulemaking that would substantially reform the agency’s framework for reviewing merger transactions under the Bank Merger Act. Among the most significant changes, the proposed rule would establish a “deemed approval” process for “de minimis merger transactions” — defined to include transactions below the Hart-Scott-Rodino Act’s adjusted lower threshold that are also less than 5 percent of the acquiring institution’s assets, as well as certain corporate reorganizations — under which qualifying filings would be approved within five business days of submission absent an objection from the U.S. Attorney General. The rule would also update the FDIC’s initial Herfindahl–Hirschman index (HHI) competitive effects screen, a measure used to gauge market competitiveness, to incorporate credit union shares and centrally booked deposits alongside traditional bank and thrift deposits, and would establish a competition safe harbor for transactions resulting in an HHI of 1,800 or less or an increase of less than 200 points. The proposed rule would further raise the expedited processing asset threshold for eligible depository institutions from 10 to 25 percent of the acquiring institution’s total assets.

The FDIC also proposed imposing structured timelines throughout the process: 90 days for standard processing of transactions resulting in institutions with less than $50 billion in assets, and 150 days for all other standard filings, with one-time extensions of up to 90 and 120 days, respectively. The agency would be required to notify applicants within 21 days if a filing is incomplete, and filings not flagged within that period would be deemed substantially complete. The rule would also define “merger in substance” using an 80 percent asset acquisition threshold over a rolling 12-month period, replacing the current qualitative approach, and would establish a new notice-and-non-objection framework for “significant asset transfers” that increase an institution’s assets by 25 percent or more. Additionally, the proposed rule would clarify that adverse public comments or “CRA protests” would not automatically remove a filing from expedited processing. Comments are due 60 days after publication in the Federal Register.