WASHINGTON — The Financial Stability Oversight Council is proposing to dedesignate Zions Bancorp. as a systemically important financial institution.

The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. also approved Zions’ application to merge its holding company with its bank, to form Zions Bancorporation. The merger is set to be completed in late September, the Salt Lake City company said Wednesday. No other SIFI banks have undergone such a restructuring.

The moves comes after Zions announced in November that it would scuttle its bank holding company in order to shed its SIFI designation.

Bloomberg News

If the FSOC approves the dedesignation, it will be free of any SIFI restrictions once the merger is complete, according to a release from the Treasury Department. The council is required to make a final decision within 60 days. But that decision appears to be a foregone conclusion. Treasury Secretary Steven Mnuchin said in a press release that Zions does not pose a threat to U.S. financial stability.

Zions executives said they were pleased by the move.

“We acknowledge and greatly appreciate the work by the Council members and staff at the FSOC, as well as by management and staff at the OCC and the FDIC, in helping us achieve a streamlined organizational structure that will help ensure that the bank is able to better meet the needs of the customers and communities it serves, while continuing to operate in a safe and sound manner,” Zions CEO Harris Simmons said in a press release.

The Dodd-Frank Act requires that all bank holding companies with more than $50 billion in assets are automatically regulated as SIFIs, subjecting them to enhanced prudential requirements such as stress testing, capital and liquidity requirements. Zions Bancorp. has assets exceeding $65 billion, but by restructuring as a national bank instead of a bank holding company, it was able to appeal its status.

The banking industry has questioned the $50 billion asset threshold, and applauded a provision in the regulatory relief bill that President Trump signed in May that increased the threshold to $250 billion.

Under the new law, banks with assets between $50 billion and $100 billion, a group that includes Zions, were immediately exempt from supervision. Banks with assets between $100 billion and $250 billion are set to be exempt 18 months from when the bill was signed. Within those 18 months, the Federal Reserve has the authority to decide whether these banks will still face supervision.

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