FDIC Updates Bank Merger Guidance To Include Non-Compete Ban

On March 21, 2024, the Federal Deposit Insurance Corporation ("FDIC") approved a Federal Register notice seeking public comment on its proposal to revise its current Statement of Policy on Bank Merger Transactions. Among the proposed revisions, the agency's proposal will prohibit non-compete agreements in bank mergers in which the selling bank is required to divest all or a portion of its business lines or branches.

The FDIC is one of three federal banking agencies charged with responsibility for evaluating bank transactions subject to Section 18(c) of the Federal Deposit Insurance Act, also known as the Bank Merger Act ("BMA"). The Bank Merger Act requires regulatory approval for any merger transaction involving an FDIC-insured depository institution ("IDI"), including mergers involving an IDI and any non-insured entity. Under the BMA, the federal banking agencies are prohibited from approving bank mergers that would have monopolistic effects as well as