FDIC, OCC, and DOJ Finalize Stricter Bank Merger Review Policies
On September 17, 2024, the FDIC, OCC, and DOJ simultaneously announced finalized changes to their bank merger review policies, marking the most significant overhaul of these frameworks in years. The updated rules increase scrutiny for mergers creating insured depository institutions with over $100 billion in assets and expand the scope of information required in merger applications. The DOJ aligned its antitrust approach with the banking regulators' updated standards.
For the BaaS and embedded finance sector, these changes are particularly consequential as they directly affect how banks can acquire fintech firms or nonbank entities that operate in the banking-as-a-service space. Legal advisors noted that the new policies require careful entity selection for acquirers pursuing bank-fintech deals. The regulatory shift comes amid ongoing concerns about the bank-fintech partnership model highlighted by events such as the Synapse bankruptcy.
Industry observers expect these changes may slow the pace of bank-fintech M&A activity in the near term while parties adjust to the new requirements.
- Bank-fintech M&A transactions will face longer timelines and more demanding disclosure requirements, potentially cooling deal flow
- BaaS providers and sponsor banks may need to restructure partnership and acquisition approaches to navigate heightened regulatory scrutiny