FDIC Approves Heightened Merger Scrutiny and Recordkeeping Rules for Banks

On September 17, 2024, the FDIC and OCC finalized significant policy changes to the bank merger and acquisition approval process. The FDIC approved a policy update requiring applicants to provide more detailed information on concentrations beyond traditional deposits, including small business and residential lending portfolios. The OCC broadened its jurisdiction over merger reviews and eliminated expedited review processes for certain application categories.

Both agencies emphasized more thorough evaluations of statutory factors such as financial stability, competition, and community impact. While these rules do not directly target fintech charter approvals, they raise the bar for any bank acquisition strategy that fintechs might pursue to obtain banking capabilities. The increased regulatory burden on M&A activity reinforces the existing dynamic where fintechs rely on BaaS partnerships with chartered banks rather than acquiring or obtaining their own charters.