(Reuters) -The Federal Deposit Insurance Corporation's board of directors approved a proposal Monday to roll back a Biden-era policy that ramped up the scrutiny of large bank mergers, the agency said in a statement on Monday.

The proposal will temporarily reinstate the merger policy that was in effect prior to 2024 as the FDIC conducts a broader reevaluation of its bank merger review process, the agency said.

The move by the Republican-led FDIC reverses efforts by prior Democratic leadership to apply stricter scrutiny to potential bank mergers, particularly when it comes to larger firms.

The prior policy, adopted in 2024, would have subjected larger banks pursuing mergers to much stricter oversight. For example, the prior policy indicated that any bank merger that led to a firm with over $50 billion in assets should be subject to public hearings and feedback, and mergers resulting in a bank with over $100 billion in assets should be subjected to heightened analysis for financial stability risks.

The tougher policy came amid a broader push to apply more scrutiny to industrial mergers throughout the Biden administration, which is expected to retreat under the more business-friendly Trump administration.

Banks had complained for years that the process for obtaining regulatory approvals for mergers is complex, lengthy and opaque. The Bank Policy Institute, which represents larger firms, was critical of the prior FDIC policy, arguing it exacerbated regulatory uncertainty for banks and overstepped bounds set by Congress.