On July 30, the FDIC released its NPRM and request for comment to amend the regulations under the Change in Bank Control Act (CBCA) regarding advance notice requirements for certain acquisitions of voting securities of FDIC-supervised institutions. Specifically, the FDIC’s current regulations “exempt [entities] from a notification requirement when the [Fed] reviews a notice under the CBCA.” The proposal would “remove the current exemption in order to ensure appropriate review of certain transactions, increasing the likelihood that all the statutory factors in the CBCA are met, and reducing the likelihood that certain transactions would result in an adverse effect on the Deposit Insurance Fund.”

To implement the change, the FDIC proposes amending the definition of “covered institution” to remove the reference to holding companies and associated exemptions. The proposed rule also removes the exemption at section 303.84(a)(8), which stated: “[t]he acquisition of voting securities of a depository institution holding company for which the [Fed] reviews a notice pursuant to the CBCA.”

The FDIC explained the rule was originally created to avoid duplicate regulatory review by both the Fed and the FDIC, but that the proposed change is necessary due to new “risks created by possible outsized control over and concentration of ownership of FDIC-supervised institutions.”

The FDIC also released twenty items for public feedback. Comments must be received within 60 days following publication in the Federal Register.