Bank Mergers will Receive More Antitrust Scrutiny under New FDIC Rule

Randy Benjenk’s commentary was included in a Compliance Week article covering a new rule issued by the Federal Deposit Insurance Corporation (FDIC) that will place increased scrutiny on mergers that combine to create an institution with $100 billion or more in assets.

Randy said the new rule “shows the current administration’s skepticism toward bank mergers, and especially mergers by larger institutions.” More review and more scrutiny will inevitably lead to longer review times, he added.

“The DOJ and FDIC, in particular, have armed themselves with several new factors they can invoke to challenge a merger as being anticompetitive. In practice, it is unclear how the agencies will apply these factors and what data they will consider,” Randy said. “This uncertainty may chill merger activity, because acquirers want to know in advance whether antitrust-related divestitures will be required, and to what extent, before they sign a deal.”