Introduction
Every financial institution merger must pass two distinct approval tracks. Banking regulators (the Fed, FDIC, and OCC) evaluate safety, soundness, capital adequacy, management quality, and community impact under the Bank Merger Act and Bank Holding Company Act. Separately, the DOJ evaluates competitive effects under the Clayton Act and Sherman Act, with the authority to challenge mergers that substantially lessen competition regardless of what banking regulators decide. This dual-track structure makes antitrust risk a central consideration in every FIG deal, and the policy swings since September 2024 (a tougher DOJ standard, followed by a deregulatory reversal at the banking agencies) are something FIG bankers must be able to explain.
The 2024 Regulatory Framework Overhaul
On September 17, 2024, the DOJ, FDIC, and OCC released coordinated but separate policy updates that changed how bank mergers are evaluated. The Federal Reserve notably did not participate, maintaining its precedent-based approach.
- Banking Addendum to the 2023 Merger Guidelines
The 2024 Banking Addendum is the DOJ's short supplement explaining how the general 2023 Merger Guidelines (used for all industries) apply to bank transactions, issued alongside the DOJ's withdrawal from the 1995 Bank Merger Guidelines. The practical change is the structural presumption: a merger is presumed anticompetitive if it increases the HHI by more than 100 points in a market where the post-merger HHI exceeds 1,800, or if it creates a firm with more than 30% share while increasing the HHI by more than 100 points (the 1995 screen used a 200-point increase). The Addendum also widens the analysis beyond deposit share to products and services (credit cards, mortgages, commercial loans), networks and platforms (payment systems, digital banking), distinct customer groups (retail, commercial, small business), and geographic dimensions beyond traditional banking markets.
The FDIC simultaneously issued a final Statement of Policy on Bank Merger Transactions that heightened scrutiny for deals creating institutions with $100 billion or more in assets and set an expectation of public hearings for mergers producing $50 billion+ institutions. The OCC eliminated its expedited review procedures and streamlined application, which had allowed smaller, clean deals to proceed on a faster timeline. The immediate effect was more scrutiny for more deals.
The 2025-2026 Reversal at the Banking Agencies
Most of the banking agency changes did not survive the change of administration. The FDIC proposed rescinding its 2024 policy in March 2025, and its Board approved the rescission on May 20, 2025, reinstating the pre-2024 policy. The OCC restored expedited review and the streamlined application through an interim final rule on May 8, 2025, and withdrew its 2024 policy statement. On September 17, 2026, the FDIC went further and proposed a rule to overhaul its merger review, with fixed review timelines and a competitive analysis that counts credit unions and centrally booked deposits. It is not yet final.
The DOJ side did not reverse: the 2023 Merger Guidelines and the Banking Addendum remain its framework, while the Fed still applies the 1995 screen. The result is a split standard across agencies reviewing the same deal, and genuine uncertainty for deal planning.
HHI Analysis and Deposit Market Concentration
The Herfindahl-Hirschman Index remains the primary quantitative tool for evaluating competitive effects in bank mergers.
- Herfindahl-Hirschman Index (HHI)
The HHI measures market concentration as the sum of the squared market shares of every firm in a defined market, from near zero in a fragmented market to 10,000 for a monopoly. In bank mergers the traditional input is each institution's share of deposits in a local banking market, and regulators look at both the post-merger level and the increase the deal causes.
The Fed and the DOJ now apply different screens to those numbers:
| Test | Federal Reserve (1995 Bank Merger Guidelines) | DOJ (2023 Merger Guidelines) |
|---|---|---|
| Highly concentrated market | Post-merger HHI above 1,800 | Post-merger HHI above 1,800 |
| Increase that raises concern | More than 200 points | More than 100 points |
| Share-based presumption | None | Above 30% share with a 100+ point increase |
| What gets measured | Local deposits, thrifts at 50%, some credit unions | Any relevant product, customer, or network market |
The Addendum's expansion beyond deposits is equally significant. A bank that dominated local commercial lending with modest deposit share once faced little antitrust concern; now the DOJ asks whether the merger reduces competition in any relevant product market, including small business lending, wealth management, mortgage origination, and payment networks.
Jurisdiction: DOJ vs. FTC for Financial Mergers
The DOJ reviews bank mergers, but non-bank financial services deals can land at either the DOJ or the FTC.
DOJ jurisdiction covers all bank holding company mergers, nationally chartered bank mergers, state-chartered FDIC-insured bank mergers, and savings and loan holding company mergers. The DOJ also reviews credit union-bank acquisitions (which reached a record 22 deals in 2024).
Non-bank deals go through the standard Hart-Scott-Rodino process, where the FTC and DOJ allocate each filing through interagency clearance based on experience with the industry rather than a fixed rule. That covers insurance broker and carrier mergers, asset management consolidation, non-bank mortgage lenders, fintech acquisitions, and finance companies. Insurance brokerage shows both agencies at work: the DOJ sued to block Aon's acquisition of Willis Towers Watson in 2021 (the deal was abandoned the following month), while the FTC handled Gallagher's $13.45 billion AssuredPartners acquisition, issuing a second request in March 2025 that pushed closing out to August 2025. That deal was one of the insurance brokerage mega-deals that have reshaped the sector since late 2023.
Recent Enforcement: What Got Through and What Did Not
The Capital One-Discover merger ($35.3 billion, announced February 2024) tested the new framework's limits. Critics estimated the combined company would hold roughly 30% of subprime credit card lending, exactly the kind of product and customer-segment concern the Addendum invites. The deal drew a cardholder class action seeking to block it and significant public opposition. The DOJ ultimately did not object, the Fed found the local deposit markets within its screens, and the Fed and OCC approved the deal on April 18, 2025, with the Fed pairing its approval with a $100 million penalty against Discover for interchange overcharges and the OCC attaching conditions tied to Discover's outstanding enforcement actions. The transaction closed in May 2025 after roughly 15 months of review.
Fifth Third's $10.9 billion acquisition of Comerica shows how much the clock has changed. Announced in October 2025, it won Fed approval 99 days later and closed on February 1, 2026, despite real overlap in Michigan, where Comerica is the larger franchise.
The TD Bank-First Horizon withdrawal ($13.4 billion, terminated May 2023) is often cited as an antitrust failure, but the deal was abandoned primarily due to TD's anti-money-laundering compliance issues, not competitive concerns. TD paid First Horizon a $200 million termination fee.
How FIG Bankers Navigate Antitrust Risk
Antitrust analysis begins before a deal is announced. FIG bankers perform pre-deal competitive assessments that map HHI impacts across every overlapping local market, identify product markets where combined share approaches 30%, and estimate the scope of potential divestiture requirements.
The deal protection toolkit includes outside dates sized to the expected review, with extensions if regulatory approval is the only missing condition, reverse termination fees capped to reflect regulatory risk allocation, and regulatory condition triggers that give either party walk rights if approvals are not obtained. Preemptive divestiture packages, where the acquirer identifies branches and business lines it will sell before filing, remain the standard approach, though the DOJ's skepticism about whether branch divestitures alone address competitive concerns means FIG bankers increasingly propose business line divestitures or behavioral commitments alongside branch sales.
The current environment rewards early and frequent engagement with DOJ staff, comprehensive economic analysis of all relevant product markets (not just deposits), and realistic expectations about review timelines. Large regional deals announced in 2025 cleared the banking agencies in roughly two to four months, but the DOJ's 2023 framework is still on the books and agency policy has swung twice in two years. FIG bankers who plan for both a fast approval and a contested one will deliver better outcomes for clients.
