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DOJ announces its withdrawal from the 1995 Bank Merger Guidelines
On September 17, the DOJ announced its withdrawal from the 1995 Bank Merger Guidelines, stating the 2023 Merger Guidelines will be the only authoritative statement across all industries. This decision followed collaboration with the Fed, FDIC and OCC and was informed by public feedback, departmental experience and market developments. The 2023 Merger Guidelines include predefined market definitions and thresholds for Herfindahl-Hirschman Index (HHI) calculations to identify mergers with significant adverse effects on competition. The DOJ also announced the release of new commentary for the 2023 Merger Guidelines, which identify competition issues related to bank mergers and provide transparency on the DOJ’s merger review process.
The announcement also clarified that neither the 2023 Merger Guidelines nor the 2024 Banking Addendum to these Guidelines predetermine DOJ enforcement actions, and that enforcement decisions will be made on a case-by-case basis. The 2024 Banking Addendum to the 2023 Merger Guidelines highlights the DOJ’s approach to evaluating competition in bank mergers under the Clayton Act. The Addendum identifies relevant sections of the 2023 Merger Guidelines for analyzing competitive consequences in banking, such as geographic overlaps and product-specific competition.
FDIC provides relief from audit, reporting requirements triggered by stimulus-related asset growth
On October 20, the FDIC issued an interim final rule providing regulatory relief to insured depository institutions (IDIs) that have experienced significant, but temporary, asset growth due to government stimulus efforts. Previously, an IDI would be subject to annual independent audit and reporting requirements in any fiscal year in which its assets at the start of the year were $500 million or more. The interim rule permits IDIs to determine if they are subject to these requirements for fiscal years ending in 2021 based on their consolidated total assets as of December 31, 2019, or as of the beginning of their fiscal years ending in 2021, whichever is less. However, the rules also permit the FDIC to require IDIs to comply with the audit and reporting requirements if asset growth was related to a merger or acquisition. The rule will remain in effect through December 31, 2020, unless extended.