The OCC is restoring its former practices and policies under the Bank Merger Act to reinstate expedited merger reviews and streamlined business combination applications.
On May 8, 2025, the Office of the Comptroller of the Currency (OCC) issued an interim final rule (Interim Final Rule) to rescind a 2024 final rule (2024 Final Rule) that amended the OCC’s bank merger application review procedures. The OCC simultaneously rescinded the Statement of Policy that served as an appendix to the 2024 Final Rule, which summarized the principles that the OCC stated it would use when reviewing proposed bank mergers subject to its jurisdiction (for more information, see this Latham blog post).
Recent Regulatory Revisions of the OCC’s Bank Merger Authority
The Bank Merger Act (BMA) governs the OCC’s authority to review business combinations of national banks and federal thrifts. The OCC must consider factors such as market competition, public convenience, systemic risk, and institutional effectiveness in approving a bank merger. The BMA process generally requires public notice, disclosure, public comment, and possible hearings or meetings regarding a merger application.
On September 17, 2024, in the final months of the Biden Administration, the OCC issued the 2024 Final Rule to remove its expedited review procedures and streamlined business combination application provisions under the BMA. The 2024 Final Rule described any BMA business combination as a “significant corporate transaction” that required OCC oversight, without availability of an expedited approval process. The 2024 Final Rule was published along with a policy statement that summarized the statutory factors under the BMA that the OCC would consider when reviewing national bank and federal thrift merger applications.
The 2024 Final Rule went into effect in January 2025, despite industry criticism targeting the potential increase in complexity, cost, and processing times of merger applications for certain transactions and institutions. These concerns were justified: since most bank acquisition transactions involve the holding companies of OCC-regulated institutions, they require the approval of the Board of Governors of the Federal Reserve System, which must consider factors very similar to those considered by the OCC under the Bank Merger Act. The merger of the subsidiary banks is usually necessary for the acquiring institution to consolidate operations, but seldom raises new significant issues.
Back to the Future
The Interim Final Rule restores the streamlined application and expedited review procedures for proposed bank merger transactions that existed before the adoption of the 2024 Final Rule. By rescinding the 2024 Final Rule and the Statement of Policy, the OCC is seeking to “reduce the burden and uncertainty” associated with the 2024 Final Rule, and reestablish its longstanding bank merger precedent.
The OCC is issuing the Interim Final Rule, effective immediately upon publication in the Federal Register, without prior notice or public comment opportunity. The OCC noted that the formal rulemaking process does not serve the public interest in this instance on the ground that the 2024 Final Rule hampered innovation and economic benefit. The OCC indicated, however, that it is still interested in public comments on all aspects of the Interim Final Rule.
The OCC’s actions align with other Trump administration efforts to reverse laws, rules, and regulations implemented during the Biden administration. In March, the Federal Deposit Insurance Corporation (FDIC) rescinded its 2024 Statement of Policy on Bank Merger Transactions and issued a proposal to reinstate the FDIC’s bank merger policy statement that was in effect prior to 2024 (for more information, see this Latham blog post).
Parallel Congressional Action
The OCC’s rescission follows shortly after formal Senate disapproval of the Biden-era bank merger regulation. On May 9, 2025, the Senate passed S.J. Res. 13 by a 52-47 vote under the Congressional Review Act (CRA), a legislative mechanism used to invalidate recent agency regulatory actions (for more information, see this Latham blog post). Concurrent legislation has been introduced in the US House and, if voted upon and approved by the president, would eliminate the future possibility of substantially similar rulemaking from the OCC (unless expressly authorized by future legislation).
Whether the 2024 Final Rule and Statement of Policy is successfully eliminated by Congressional action or by the OCC itself, bank merger policy in the US is shifting yet again. It has taken a step back in time, but arguably a step forward toward reducing merger complexity and fostering economically beneficial business combinations in the banking sector.
