OCC Reverts to Prior Merger Rules

The Office of the Comptroller of the Currency ("OCC") has issued an interim final rule that restores streamlined and expedited regulatory procedures to review applications under the Bank Merger Act for business combinations involving national banks or federal savings associations. It also rescinds a policy statement for OCC review of proposed bank merger transactions under the Bank Merger Act that sought to draw "chalk lines," demarcating the considerations and varying levels of scrutiny the OCC would use. The restored provisions are largely seen as pro-merger.

The OCC has restored the former regulatory provisions without any changes to them. The interim final rule became effective on May 15, 2025, upon publication in the Federal Register. But the OCC is also accepting comments until June 16, 2025, and may issue a revised policy statement or guidance based on them.

We outline some considerations below for existing and potentially new national banks, as well as fintechs and crypto companies and non-U.S. banks.

Key Takeaways

The OCC has restored both expedited review (applications deemed approved 15 days after public comments, absent further OCC action) and streamlined application procedures for qualifying transactions under section 5.33 of the OCC's regulations without change.

• The 2024 final rule was criticized as deterring or disfavoring various mergers and transactions. With this change, the OCC is seeking to reduce the regulatory burden and uncertainty for market activity.
• The reversal effectively pivots from more subjective and ambiguous factors to more well established and neutral eligibility criteria.
• Under the restored provisions, there is less likelihood of a public meeting to delay various transactions.

By restoring these provisions, the OCC seeks to encourage economically beneficial combinations, which the industry may find helpful, particularly as compliance costs, deposit and other funding constraints, and interest rate and commercial real estate pressures have increased.

The policy shift is consistent with the Trump Administration's deregulatory policies, various executive orders, and recent similar policy changes at the FDIC.

The interim final rule's comment period is an opportunity for national banks, bank holding companies, and other interested parties—including fintechs and crypto companies—to suggest additional merger policy changes.

Considerations for Existing National Banks

The interim final rule notably reinstates automatic approval (after 15 days) for internal business reorganizations. Rather than taking a risk-based approach, the previous OCC leadership had posited than any business combination subject to a filing was a "significant corporate transaction" that required OCC approval. That approach was largely criticized as excessive and appeared emblematic of the Biden Administration's approach to bank regulation following the 2023 bank failures: seek to manage any and all risk by more uniformly applying the strictest scrutiny available in the regulatory toolbox.

In addition, various factors are no longer expressly applicable. Notably, being a global systemically important bank (or "GSIB"), or a subsidiary of one, will no longer be considered a per se transactional concern. Certain "positive" factors are also no longer codified, including that the target's combined total assets are less than or equal to 50% of acquirer's total assets and the resulting institution will have assets less than $50 billion. With the elimination of these subjective policies, banks of various sizes may consider more robust combinations.

Considerations for De Novo National Banks

By using a streamlined application—now once again available—applicants need not provide three years of financial projections for the merged institution.

The interim final rule reduces friction for organizers using interim banks in bank holding company formations, a common and relatively low-risk entry strategy. For instance, these combinations may rely on internal reorganization provisions. The elimination of the 2024 final rule no longer subjects them to heightened scrutiny under a vague "effect on communities" or "novelty" standard.

It also may facilitate startups' purchase of small, eligible banks and scale by, for instance, bringing tech and capital, but relying on the bank's existing infrastructure. These would not inherently trigger heightened scrutiny under the restored provisions and policy.

While also potentially leveraging a streamlined review process, these combinations will avoid subjective "novel" or "complex" standards that imposed full-scale merger review on startups.

Considerations for Fintechs and Crypto Companies

In addition to the above considerations, the interim final rule is seen as enabling eligible national banks, including national trust banks—an option used by various fintechs, crypto firms, and those involved in crypto-related activities—to restructure more easily. We expect that this flexibility will be a helpful consideration when picking a charter and thinking about future changes.

The relatively pro-merger changes are expected to better support fintech/crypto and other acquisitions of small OCC-chartered institutions using expedited tools, if capitalized appropriately. In addition, it changes ambiguous policy language that might have subjected novel tech-bank deals to subjective scrutiny by the OCC, especially for business models that included novel activities and technologies.

Considerations for Non-U.S. Banks

In addition to the above considerations, these relatively pro-merger changes make it easier for U.S. subsidiaries or affiliates of foreign banks to acquire eligible U.S. institutions to expand their U.S. operations.

The changes also support streamlined filings where foreign bank operations are expanding under existing U.S. charters.

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Should you need additional analysis or guidance in connection with planning how to respond to or navigate these changes, the DWT financial services team is prepared to assist.