What changed between these versions
A substantive modification. v2 significantly alters the competitive review process for financial institution mergers under $10 billion in assets by changing the directive from "shall find" no anti-competitive effects to "shall not consider" such effects. It also removes the requirement for regulators to consider a broad range of non-traditional financial entities in competitive factor reports and introduces a mechanism to adjust the $10 billion asset threshold based on GDP.
Overview
A handful of significant changes across the three amended acts. · v2 narrows the scope of competitive review for smaller financial institution transactions and introduces a new mechanism for threshold adjustment, representing a meaningful shift in regulatory approach.
The most significant change is the alteration of the competitive review standard for financial institution transactions resulting in entities with less than $10 billion in assets. v1 mandated that regulators "shall find" such transactions would not be anti-competitive, whereas v2 directs them to "shall not consider" competitive factors for these transactions. Additionally, v2 removes the explicit requirement for the Attorney General and the Board to consider a broad list of non-depository financial entities when evaluating competitive factors. Finally, v2 introduces a new provision for annual adjustment of the $10 billion asset threshold based on nominal gross domestic product.
Major additions
These new subparagraphs introduce a "Threshold adjustment" mechanism. At the end of each year where nominal GDP increases, the respective agency (Corporation for FDIA, Board for BHCA and HOLA) must adjust the $10 billion asset figure by a percentage equal to the percentage increase in nominal GDP, comparing the covered year's GDP to the highest GDP in the preceding 5 years. This ensures the threshold is dynamic.
This addition ensures that the $10 billion asset threshold for reduced competitive review is not static but will increase over time with economic growth, preventing more transactions from falling under the stricter review standard solely due to inflation or nominal growth. This provides a dynamic adjustment to the scope of the competitive review exemption.
Deletions
These deleted provisions in v1 required the Attorney General (for FDIA) and the Board (for BHCA and HOLA) to consider a broad range of entities, including depository institutions, depository institution holding companies, industrial loan companies, Farm Credit Act entities, nonbank financial companies, and credit unions, when evaluating competitive factors for proposed acquisitions, mergers, consolidations, assumptions of liabilities, or transfers of assets.
The deletion removes the mandate for regulators to consider a wider competitive landscape beyond traditional banks when assessing the competitive impact of proposed transactions. This narrows the scope of competitive analysis by removing the explicit requirement to include non-traditional financial service providers, potentially leading to a more focused, and possibly less comprehensive, competitive review for transactions that do fall above the $10 billion threshold.
Modifications
This change significantly reduces the regulatory burden and scrutiny for mergers and acquisitions involving smaller financial institutions. In v1, agencies were required to conclude that such transactions were not anti-competitive. In v2, they are explicitly directed not to evaluate competitive factors at all for these transactions, effectively creating an exemption from competitive review for mergers below the threshold. This streamlines the approval process for smaller institutions.
Before
For proposed transactions resulting in entities with less than $10 billion in assets, the responsible agency or Board "shall find that such acquisition, merger, consolidation, assumption of liabilities, or transfer of assets would not" result in a monopoly or substantially lessen competition.
After
For proposed transactions resulting in entities with less than $10 billion in assets, the responsible agency or Board "shall not consider whether such acquisition, merger, or consolidation would" result in a monopoly or substantially lessen competition.
This modification potentially limits the types of transactions that would automatically qualify for the streamlined competitive review process under FDIA 18(c)(4)(C)(iii) to only "merger transactions," excluding other forms of acquisitions, consolidations, or transfers of assets from this specific clause. This change aligns the language in (4)(C)(iii) with the new (14)(A) which also uses "merger transaction."
Before
The threshold applied if the "proposed acquisition, merger, consolidation, assumption of liabilities, or transfer of assets under this section would result in an entity with less than $10,000,000,000 in assets."
After
The threshold applies if "the proposed merger transaction would result in an entity with less than $10,000,000,000 in assets."
Scope
Meaningful expansion or narrowing — Changes are concentrated within Section 2, affecting specific paragraphs across the Federal Deposit Insurance Act, the Bank Holding Company Act, and the Home Owners' Loan Act. — Yes, v2 represents a meaningful change in policy direction. It shifts from requiring a finding of no anti-competitive effect for small mergers to explicitly exempting them from competitive consideration, and it removes the broadened scope of entities to consider in competitive analysis. — The changes directly interact with and override existing provisions regarding competitive factor considerations in the respective acts, specifically paragraph (5) of FDIA 18(c), paragraph (1) of BHCA 3(c), and subparagraphs (A) and (B) of HOLA 10(e)(2).
Impact analysis
Financial institutions (depository institutions, bank holding companies, savings and loan holding companies) with less than $10 billion in assets.
Gains (reduced regulatory burden, potentially easier and faster merger approvals).
These institutions will no longer have their proposed merger transactions subjected to competitive factor review by federal regulators.
Regulatory agencies (FDIC, Federal Reserve Board, Office of the Comptroller of the Currency).
Procedural change (reduced scope of review, altered mandate).
Agencies are now prohibited from considering competitive factors for merger transactions involving institutions under $10 billion in assets, and are no longer explicitly required to consider a broad range of non-traditional financial entities in competitive reports for larger transactions.
Consumers and the broader financial market.
Procedural change (less regulatory oversight on competition for smaller mergers).
Competitive impacts of mergers involving institutions under $10 billion will not be formally assessed by regulators.