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Earlier today, the Federal Reserve issued an order authorizing People’s United Financial, Inc. to acquire Suffolk Bancorp (the “People’s United Order”). The People’s United Order is notable because the Federal Reserve has expanded the presumptive safe harbors it applies when reviewing bank merger and acquisition proposals under the Bank Holding Company Act of 1956 for risks to U.S. financial stability.

Going forward, the Federal Reserve will now presume that a proposal does not raise material financial stability concerns if it involves the acquisition of less than $10 billion in assets or results in a firm with less than $100 billion in total assets, absent evidence that the transaction would result in a significant increase in interconnectedness, complexity, cross-border activities, or other factors. For qualifying transactions, this change is significant because it will substantially reduce the need to provide information relating to financial stability indicators and may accelerate the processing of applications by the Federal Reserve.