FDIC’s Proposal for Strict Bank Merger Policy in Spotlight

American banks face the prospect of steeper regulatory hurdles when looking to merge with other lenders, according to a proposal from the Federal Deposit Insurance Corporation (FDIC) that concluded its public comment period on Tuesday, with the agency now weighing contrasting views before deciding which way to go with its policy revamp. The FDIC in late March proposed revisions to its statement of policy (SOP) on bank merger transactions, which would apply to all U.S. banks and give regulators more reasons to reject merger plans under a more rigorous so-called “principles-based” approach to take into more direct account the potential effects a bank merger could have on financial stability, local communities, and competition....