March 21 (Reuters) - Mergers that could result in banks

with more than $100 billion in assets should expect heightened

scrutiny from the U.S. Federal Deposit Insurance Corporation,

according to draft guidance the agency released Thursday.

The FDIC's board of directors is poised to vote on the

proposal on Thursday. If adopted, the proposal would update the

agency's merger guidance for the first time in 16 years and put

special emphasis on maintaining the stability of the banking

sector, agency staff said Thursday ahead of the vote.

Bank mergers and industry consolidation have come under

intense scrutiny since last year, when three of the largest-ever

U.S. bank failures resulted in mergers.

The draft proposal, which offers a statement of

principles rather than set procedures, says officials would also

focus on other financial stability concerns, such as whether the

resulting merged bank would cause the financial system to become

more complex and the extent of its cross-border activities.

After three of the largest-ever U.S. bank failures last

year, lawmakers from both major parties have lambasted the

FDIC's handling of subsequent mergers.

Financial reform advocates such as Democratic Senator

Elizabeth Warren have expressed outrage that regulators allowed

Wall Street giant JPMorgan Chase & CO ( JPM ), already the

nation's largest bank, to acquire the failed First Republic Bank ( FRCB )

last year.

In the wake of the 2023 bank failures, FDIC Board Member

Rohit Chopra, a Warren ally who heads the U.S. Consumer

Financial Protection Bureau,

pledged tougher scrutiny

of merger applications.

Bank executives on the other hand

have complained

that regulators' foot-dragging has helped depress merger

activity among healthy banks to historic lows.