FDIC to regularly receive updates on ongoing merger applications.

The Federal Deposit Insurance Corporation (FDIC) has taken a significant step towards expediting application processing, as the board has unanimously approved a resolution to speed up the review process.

Vice Chair Travis Hill introduced the resolution during Thursday's meeting, aiming to provide the FDIC board with "more regular and rigorous oversight" of the merger and insurance application review process.

Under the new directive, banks whose applications have remained undecided for more than 270 days will automatically be discussed at the next FDIC board meeting. This measure is designed to address concerns that some applications have been taking an excessively long time to be processed.

Vice Chair Hill noted, "For certain applications, our process is taking too long." FDIC Chair Martin Gruenberg supports the measure, stating it would be helpful to have staff brief the board on applications that take longer than normal.

The resolution also requires FDIC staff to appear and brief the board, providing details on steps taken since the application was submitted, and outlining steps yet to be taken and their associated time frames.

Rohit Chopra, Director of the Consumer Financial Protection Bureau, supports the resolution, but sees it as a means to swiftly deny applications that are facially deficient or not substantially complete.

The FDIC has been focusing on closer scrutiny of mergers creating banks with more than $100 billion in assets, with a focus on anti-money laundering and financial stability. For smaller banks, with $50 billion or more in assets, the FDIC will apply more scrutiny on the impact of a merger on local communities.

In a related development, the FDIC board also approved a final rule aimed at bolstering resolution planning for banks with $100 billion or more in assets. The need for stronger plans is "compelling," considering last year's bank failures.

The adoption of the measure comes days after Senate Banking Committee Chair Sherrod Brown, D-OH, wrote to FDIC Chair Martin Gruenberg, proposing changes to the regulator's policy statement on bank mergers. Brown called on the FDIC to quickly adopt a "strong" policy statement to ensure proposed bank mergers face sufficient scrutiny.

Republican lawmakers have also introduced legislation that seeks to curtail the amount of time banks wait for a regulatory response on merger applications, due to concerns it's taking too long for bank merger transactions to get approved.

This move by the FDIC marks a significant step towards improving the efficiency of the application process, aiming to provide clarity and certainty to banks and the broader financial sector.