Regulatory Developments
Federal Reserve Announces the Bank Term Funding Program will Cease Making New Loans as Scheduled on March 11
On January 24, the Federal Reserve announced that the BTFP, launched in response to the Silicon Valley Bank and Signature Bank failures of March 2023, will cease making new loans on March 11. While the BTFP will continue making new loans to participant banks until March 11, the interest rate applicable to these new loans will be no lower than the interest rate in effect on reserve balances on the day the loan is made.
Acting Comptroller of the Currency Discusses Bank Mergers
On January 29, Acting Comptroller of the Currency Michael J. Hsu discussed improving transparency and trust in the bank merger process in remarks at the University of Michigan. In his remarks, Mr. Hsu discussed how developing a view on the overall structure of the U.S. banking system could help ensure that it remains diverse, dynamic, and balanced with the economy, as well as inform bank merger policy and decisions.
In furtherance of that objective, Mr. Hsu announced that the OCC was inviting comment on a proposal to amend its regulations governing business combination applications to eliminate automatic expedited approvals and to clarify the features of merger applications and indicators that are consistent with and inconsistent with approval.
“The banking system supports the economy and the businesses, communities, and individuals that comprise it. This point bears reemphasizing when thinking about what the banking system should look like. Put simply, we don’t exist to serve banks; banks exist to serve us. Therefore, in order to have a view on what the banking system should look like, we need to be clear about what to measure it against.”
‒ Michael Hsu, Acting Comptroller of the Currency
OCC Requests Comments on Proposed Rulemaking and Policy Statement on Bank Mergers
On January 29, the OCC requested comment on a proposal to update its rules for business combinations involving national banks and federal savings associations. The OCC believes that the proposal will increase transparency about its process when reviewing transactions under the Bank Merger Act (BMA). The proposal includes a policy statement to clarify the OCC’s review of applications under the BMA. The proposed policy statement addresses: (1) general principles for the OCC’s review of applications under the BMA, including indicators for applications that may raise concerns; (2) the OCC’s consideration of financial stability; (3) managerial and financial resources and future prospects; (4) convenience and needs statutory factors under the BMA; and (5) the OCC’s decision making process for extending the comment periods or holding public meetings. Comments from the public are due 60 days from the date of publication in the Federal Register.
