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Bank Merger Act
Practical Law Glossary Item 4-503-0448 (Approx. 2 pages)
Glossary
Bank Merger Act
The popular name of Section 18(c) of the Federal Deposit Insurance Act. The Bank Merger Act requires that mergers between depository institutions be subject to the prior approval of the primary federal regulator of the resulting institution (12 USC 1828(c)). Among other things, the Bank Merger Act requires the responsible federal regulators to:
- Not approve a proposal that would result in a monopoly or would be in furtherance of any attempt to monopolize the business of banking in any relevant market.
- Not approve a proposal that would substantially lessen competition in any market unless the anticompetitive effects are clearly outweighed by concerns for the convenience and needs of the community to be served.
- Consider the financial and managerial resources and future prospects of the companies and depository institutions involved in any proposal.
- Take into account the records of the relevant depository institutions under the Community Reinvestment Act.
Pursuant to the Bank Merger Act requirements, the federal banking agencies have issued rules and an Interagency Bank Merger Act Application form. For more information on bank mergers and the Bank Merger Act, see Practice Notes, Bank Mergers and Acquisitions and US Banking Law: Overview: Mergers and Acquisitions.