18740 Proposed Rules Federal Register

1 18740 . Proposed Rules Federal Register Vol. 87, No. 62. Thursday, March 31, 2022. This section of the Federal Register Comments RIN 3064 ZA31, Federal ( dodd - frank Act) amended the Bank contains notices to the public of the Proposed Deposit Insurance Corporation, 550 17th Merger Act to include, for the first time, issuance of Rules and regulations. The Street NW, Washington, DC 20429. a financial stability factor. Fourth, and purpose of these notices is to give interested Hand Delivery/Courier: Comments finally, a recent Executive Order persons an opportunity to participate in the may be hand-delivered to the guard instructed agencies to consider the rule making prior to the adoption of the final station at the rear of the 550 17th Street impact that consolidation may have on Rules .

2 NW building (located on F Street NW) maintaining a competitive marketplace. on business days between 7:00 and Thus, the FDIC has determined that it is Federal DEPOSIT INSURANCE 5:00 ET. both timely and appropriate to review CORPORATION Public Inspection: All comments the regulatory framework and consider received will be posted without change whether updates or other changes are 12 CFR Part 303 to warranted. regulations/ Federal - Register - RIN 3064 ZA31 Consolidation in the Banking Sector publications/ including any personal information provided for public The banking sector has experienced a Request for Information and Comment significant amount of consolidation over on Rules , Regulations, Guidance, and inspection. Paper copies of public comments may be ordered from the the last 30 years as shown in Tables 1.

3 Statements of Policy Regarding Bank through 3. This period of consolidation, Merger Transactions FDIC Public Information Center, 3501. North Fairfax Drive, Room E 1002, fueled in large part by mergers and AGENCY: Federal Deposit Insurance Arlington, VA 22226, or by telephone at acquisitions, has contributed to the Corporation (FDIC). 877 275 3342 or 703 562 2200. significant growth of the number of ACTION: Request for information and FOR FURTHER INFORMATION CONTACT: Rae- large insured depository institutions, comment. Ann Miller, Senior Deputy Director, especially insured depository institutions with total assets of $100. Supervisory Examinations and Policy, SUMMARY: The FDIC is soliciting billion or more. Division of Risk Management comments from interested parties In 1990, there was only one insured Supervision, 202 898 3898, rmiller@ depository institution with assets regarding the application of the laws, ; or Ashby G.

4 Hilsman, Assistant practices, Rules , regulations, guidance, greater than $100 billion; however, that General Counsel, Bank Activities and number had increased to 33 by and statements of policy (together, Regional Affairs Section, Supervision, regulatory framework) that apply to Of these 33 insured depository Legislation and Enforcement Branch, institutions with assets greater than merger transactions involving one or Legal Division, 202 898 6636, more insured depository institution, $100 billion, nine were owned by the eight bank holding companies including the merger between an SUPPLEMENTARY INFORMATION: designated as Global Systemically insured depository institution and a noninsured institution. The FDIC is Background Information Important Banks ( GSIBs), and three interested in receiving comments were owned by foreign banking Significant changes over the past organizations designated as foreign regarding the effectiveness of the several decades in the banking industry existing framework in meeting the Global Systemically Important Banks and financial system necessitate a (foreign GSIBs).

5 3 While insured requirements of section 18(c) of the review of the regulatory framework that Federal Deposit Insurance Act (known depository institutions with total assets applies to bank merger transactions of more than $100 billion comprise less as the Bank Merger Act). involving one or more insured than one percent of the total number of DATES: Comments must be received by depository institutions pursuant to the insured depository institutions, they May 31, 2022. Bank Merger First, more than three hold about 70 percent of total industry ADDRESSES: Commenters are encouraged decades of consolidation and growth in assets and 66 percent of domestic to use the title Request for Comment the banking industry have significantly deposits.

6 On Rules , Regulations, Guidance, and reduced the number of smaller banking Consolidation also has contributed to Statement of Policy on Bank Merger organizations and increased the number the economic landscape of insured Transactions (RIN 3064 ZA31)'' and to of large and systemically-important depository institutions with assets less identify the number of the specific banking organizations. Second, the FDIC than $100 billion. Over the same 30-year question(s) for comment to which they has a responsibility to promote public period, the number of institutions with are responding. Please send comments confidence in the banking system, assets less than $10 billion has declined by one method only directed to: maintain financial stability, review from 15,099 in 1990 to 4,851 in 2020, Agency Website: https:// Proposed mergers, and resolve failing large insured depository institutions.

7 2 Prior to the Riegle-Neal Interstate Banking and jspears on DSK121TN23 PROD with PROPOSALS1. Federal - Register -publications/. Follow Third, the dodd - frank Wall Street Branching Efficiency Act of 1994, Public Law 103 . 328 (the Riegle-Neal Act of 1994), many states did the instructions for submitting reform and consumer protection Act not permit intra-state branching and interstate comments on the agency's website. branch branching was not permitted. Following the Email: Include 1 Bank Merger Act, Public Law 86 463, 72 Stat. passage of the Riegle-Neal Act of 1994, many bank RIN 3064 ZA31 in the subject line of 129 (1960); Bank Merger Act Amendments of 1966, holding companies chose to consolidate existing Public Law 89 356, 80 Stat.

8 7 (codified as amended bank charters. the message. at 12 1828(c)(2018)), available at 3 See Financial Stability Board, 2020 list of global Mail: James P. Sheesley, Assistant regulations/laws/ # systemic important banks, available at https://. Executive Secretary, Attention: VerDate Sep<11>2014 17:33 Mar 30, 2022 Jkt 256001 PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 E:\FR\FM\ 31 MRP1. Federal Register / Vol. 87, No. 62 / Thursday, March 31, 2022 / Proposed Rules 18741. a reduction of approximately 68 TABLE 2 PERCENTAGE OF INDUSTRY attention on the financial stability risks The declining number of ASSETS HELD BY INSURED DEPOSI- that could arise from a merger involving smaller insured depository institutions TORY INSTITUTIONS BY ASSET SIZE a large bank is warranted.

9 May limit access to financial services In particular, the failure of a large and credit in communities, potentially Year insured depository institution would adversely affecting the welfare of the present significant challenges to the Asset size 1990 2005 2020 FDIC's resolutions and receivership communities' workers, farmers, small (%) (%) (%). businesses, startups, and consumers. functions and could present a threat to $10B $50B .. the financial stability of the United Over this same period, the number of States. Insured depository institutions $50B $100B .. insured depository institutions with $100B $250B .. are resolved under the Federal Deposit assets between $10 billion and $100 $250B $500B .. Insurance Act. For various reasons, billion has doubled from 59 in 1990 to $500B $700B.

10 Including their size, sources of funding, 118 in 2020. However, the percentage of $700B .. and other organizational complexities, total industry assets held by all insured Source: TFR and Call Report. the resolution of large insured depository institutions with assets less depository institutions can present great than $100 billion declined by 68 percent TABLE 3 PERCENTAGE OF DOMESTIC risk to the Deposit Insurance Fund, as and their percentage of insured deposits well as extraordinary operational risk DEPOSITS HELD BY INSURED DEPOS- held declined by approximately 70 for the FDIC. In addition, as a practical ITORY INSTITUTIONS BY ASSET SIZE. percent. matter, the size of an insured depository institution may limit the resolution Several insured depository Year options available to the FDIC in the institutions with assets less than $100 Asset size 1990 2005 2020 event of billion were owned by either a (%) (%) (%) In recent history, including the global GSIB or a foreign GSIB.