PORTFOLIO CHECKS & BALANCES Are changes to bank M&A rules on the horizon? The Department of Justice and other banking agencies are evaluating a new potential M&A framework. What does this mean for community banks? By Jenna Burke little over a year since the Federal Deposit Insurance Corporation (FDIC) first issued a request for information on bank mergers and acquisitions under the Bank Merger Act, the Department of Justice (DOJ) and leaders within the federal banking agencies are expressing interest in updating existing M&A rules. A ICBA is working to ensure that any new regulatory framework promotes a strong community banking industry and protects local communities. Bank mergers are scrutinized under DOJ Bank Merger Guidelines that were last updated in 1995, when the banking industry looked very different. As ICBA has repeatedly pointed out, this framework is outdated and no longer reflects either the realities of the competitive field or the advances in mobile and online banking that have taken place since 1995. These guidelines reflect an era when there were no fintechs and much smaller credit union and Farm Credit System (FCS) competition, and interstate branching had just recently been introduced. The seven largest U.S. banks didn't yet have the same combined market share of deposits as the rest of the banks combined. Today, this outdated framework often delays or even prevents community bank mergers that would preserve community bank presence in communities, especially small rural communities, while all too often green-lighting megamergers of toobig-to-fail banks. Renewed M&A interest In June, assistant attorney general Jonathan Kanter once again shined a spotlight on bank M&As in a speech where he said that it's time " to take stock of how the department is fulfilling its statutory role in bank merger enforcement " 36 // ICBA Independent Banker // September 2023 Photo by Tada Images/Adobe