What is the bank merger Act?

What is the bank merger Act?

The Bank Merger Act prohibits the FDIC from approving any proposed merger transaction that would result in a monopoly, or would further a combination or conspiracy to monopolize or to attempt to monopolize the business of banking in any part of the United States.

Who regulates bank mergers?

REGULATORY PROCESS OVERVIEW Most bank M&A involves mergers of BHCs and their subsidiary banks. The Board of Governors of the Federal Reserve System or its delegees (“Federal Reserve”) evaluate and act on BHC M&A pursuant to the Bank Holding Company Act of 1956 (“BHC Act”), Section 3(a).

Does the FDIC approve bank mergers?

Pursuant to Section 44 of the FDI Act (12 U.S.C. 1831u), the FDIC may approve a merger transaction between insured banks with different home states when the resulting bank will be a state nonmember bank, without regard to whether the transaction is prohibited under state law.

What did the Federal Deposit Insurance Corporation do during the Great Depression?

The FDIC, or Federal Deposit Insurance Corporation, is an agency created in 1933 during the depths of the Great Depression to protect bank depositors and ensure a level of trust in the American banking system.

What happens to employees when banks merge?

Key Takeaways. The uncertainty resulting from a merger or acquisition can increase stress levels and signal risk to target company employees. Mergers and acquisitions tend to result in job losses for employees in redundant areas in the combined company.

What are mergers and acquisitions regulated by?

Generally, the federal government regulates sales and transfers of securities through the Securities and Exchange Commission (SEC), and polices competition matters through the Antitrust Division of the Department of Justice (DOJ) and the Federal Trade Commission (FTC).

Are banks allowed to merge?

Over time, however, regulators have become far more deferential to banks that want to merge. According to my research, the Federal Reserve has now approved more than 3,500 consecutive merger applications since 2006 without issuing a single denial.

When was May merger approved?

Once the meeting is held, if a majority of the shareholders vote in favor of the merger agreement, the merger is approved. Keep in mind that Section 251 contains a number of exceptions for when a vote of the shareholders is not required.

Is the Federal Deposit Insurance Corporation still around today?

Since 1933, no depositor has ever lost a penny of FDIC-insured funds. Today, the FDIC insures up to $250,000 per depositor per FDIC-insured bank. An FDIC-insured account is the safest place for consumers to keep their money. Learn more about deposit insurance here.

What happens to employees after merger?

Employees have the right to enjoy vacations, get pregnancy and parental leaves, get a termination, and severance pay. The continuity of service is an important aspect that is looked upon in case of a merger or an acquisition as the transferred employees have to be given these rights by way of continuity of service.

Does the insured savings bank Act apply to bank mergers?

Prior to amendment, par. (12) read as follows: “The provisions of this subsection shall not apply to any merger transaction involving an insured Federal savings bank unless the resulting institution will be an insured bank other than an insured Federal savings bank. ” Subsec. (i) (5). Pub. L. 100–86, § 504 (b) (2), added par. (5). Subsec. (j) (1).

What does the FDIC consider in a merger transaction?

Interstate bank merger transactions. Where a proposed transaction is an interstate merger transaction between insured banks, the FDIC will consider the additional factors provided for in section 44 of the Federal Deposit Insurance Act, 12 U.S.C. 1831u. 2. Interim merger transactions.

What does it mean to merge with another bank?

(1) Merge or consolidate with, purchase or otherwise acquire the assets of, or assume any deposit liabilities of, another insured depository institution if the resulting institution is to be a state nonmember bank, or

When to bring an antitrust lawsuit against a merger?

Any action brought under the antitrust laws arising out of a merger transaction shall be commenced prior to the earliest time under paragraph (6) at which a merger transaction approved under paragraph (5) might be consummated.