Statement by Governor Michelle W. Bowman on the changes to the FR Y-3, FR Y-3F, FR Y-3N, and FR Y-4

August 9, 2024

The final changes to the FR Y-3 and FR Y-3F include a new question that requires an applicant to submit an integration plan at the time of the initial application. The information requested is extensive and requires specificity that may be challenging for applicants to provide at the time of filing:

how risk management systems, operational processes, products and services, and other functions/processes of the applicant and target companies would be combined to achieve the strategic, financial, and operational goals of the proposed transaction;
the expected timeline to complete the integration process, focusing on core system conversions;
identification of integration plan leadership and/or key personnel responsible for monitoring and completing the principal elements of the plan; and
as appropriate, specific completion dates for key elements of the integration plans.

Applications often include plans for integration, as this can factor into the consideration of an application's likelihood of approval. However, I remain concerned that the specificity required by the revisions to these forms may present increased upfront costs and burdens for banks in seeking regulatory approval.

While these form changes need not result in a fundamental change in regulatory approach to reviewing applications, I fear that these new demands will create further delays in the overall processing timeline for bank merger and acquisition (M&A) transactions. Delays in application processing times can increase banks' reputational risk and operational risk (including the risk of a failed merger), lead to higher transaction expenses, and lead to staff attrition in the face of prolonged uncertainty. In my view, it is important that regulators recommit to the timely and prompt processing of bank M&A applications.