Describe the Bank Merger Act

Question

What will be an ideal response?

Answer 1

The Bank Merger Act of 1966 requires that all bank mergers be approved in advance by the banking agency having jurisdiction—that is, the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), or the Comptroller of the Currency. Before making a decision, the agency with jurisdiction must obtain a report "on the competitive factors involved" from the U.S. attorney general and from the other two agencies.
Even if the agency approves the merger, the U.S. Justice Department may bring a suit within 30 days. This action automatically stays the merger, and a federal district court must then review all issues concerning the merger de novo. If not challenged by the U.S. attorney general within 30 days, a bank merger is still subject to liability under Section 2 of the Sherman Act if it is shown to have resulted in a monopoly. Acquisitions by bank holding companies are subject to the same antitrust standards that are applied to other industries.
The Bank Merger Act has become more significant in light of a 1985 decision of the U.S. Supreme Court approving regional banking and acquisitions by banks across state lines, when state legislatures have given prior approval. Furthermore, major bank, insurance, and brokerage companies have merged, and large banks have merged with each other.