Fed Watchdog Says Bank Merger Reviews Are Getting Slower

• Median processing times for merger and acquisition applications rose roughly 11% overall between 2021 and 2024, with merger reviews specifically climbing 40% for small community banks and 18% for larger ones, even as application volume fell 20%.
• The Fed's FedEZFile tracking system failed to capture critical internal milestones including kickoff meetings, division reviews, and governors' votes, preventing managers from identifying bottlenecks and forcing staff to maintain incomplete manual spreadsheets.
• The Fed's Division of Supervision and Regulation has agreed to implement mandatory staff training by Q3 2026, develop real-time tracking dashboards by Q1 2027, and establish a formal review process for time targets.

Summary: Fed Bank Merger Review Times Increasing Despite Reform Efforts

The Federal Reserve's Office of Inspector General (OIG) released a report Monday, March 23, 2026, revealing that bank merger and acquisition approval times have significantly increased despite dedicated efficiency reforms. The findings apply specifically to community banks with assets under $10 billion.

Key Data Points:

• Median processing times rose approximately 11% across all application types between 2021 and 2024
• Application volume decreased 20% during the same period
• M&A processing times jumped 40% for small community banks and 18% for larger community banks
• The OIG reviewed 15 applications and could not reconstruct complete processing timelines for most

Core Issues Identified:

The Fed's Division of Supervision and Regulation lacks adequate data infrastructure to identify and address bottlenecks. The FedEZFile tracking system, implemented in 2022, fails to capture critical internal milestones including kickoff meetings, material reviews, and governors' votes. Staff compensated with manual spreadsheets that proved incomplete and inconsistent.

Additional delays stem from incomplete applicant responses, slow inter-agency coordination, background check delays, and insufficient internal delegation with multiple senior officials reviewing identical materials separately.

Remedial Actions:

The Fed accepted all three OIG recommendations:

• Mandatory FedEZFile training scheduled for Q3 2026
• Real-time application tracking dashboards planned for Q1 2027
• Formal periodic review process for time targets

System updates were implemented in October 2025, with guidance issued in December.

Market Implications:

These delays create regulatory uncertainty during continued community bank consolidation, potentially slowing industry restructuring and increasing compliance costs for institutions pursuing strategic combinations. The OIG will monitor whether implemented reforms achieve meaningful improvement in processing efficiency.