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 a policy statement the top bank regulator proposed on Thursday.

The FDIC's board of directors voted 3-2 to issue the proposal, which would update the agency's merger guidance for the first time in 16 years. The new guidance puts special emphasis on maintaining the stability of the banking sector, agency officials said in advance 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 acquisitions and billions in losses for the FDIC's insurance fund.

"The bank failures of 2023 underscore the risks that banks with assets over $100 billion can have for financial stability," FDIC Chair Martin Gruenberg said at a public meeting ahead of the vote.

Republican board members, however, opposed the proposal saying it would make the process less predictable and entrench what they called institutional bias against bank mergers.

Jonathan McKernan, a Republican member of the board, said adding hurdles to mergers resulting in banks above $100 billion could discourage the creation of new competitors to established Wall Street giants.

"One of the potential unintended consequences...is that we continue to enhance this moat of regulatory protection around our largest banks," he said.

In a statement, the Bank Policy Institute, a major trade group in Washington, said the new guidance continued "an alarming trend" among regulators of discouraging bank mergers and acquisitions and that its "subjective" standards would make the merger review process more uncertain.

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 a merged bank would add complexity to the financial system and the extent of its cross-border activities.

The changes reflect statutes adopted by Congress in 2010 under the Dodd-Frank Wall Street reform legislation, according to the proposal, which is now subject to a 60-day period of public comment.

Financial reform advocates such as Democratic Senator Elizabeth Warren have expressed outrage that regulators allowed Wall Street giant JPMorgan Chase & CO, already the nation's largest bank, to acquire the failed First Republic Bank last year.

Despite misgivings about New York Community Bank's exposure to commercial real estate and earlier concerns from FDIC officials, the U.S. Office of the Comptroller of the Currency, another banking regulator, in 2022 approved its merger with Flagstar Bank of Michigan.

Regulators then approved NYCB's takeover of the failed Signature Bank last year. The combined entity reported a surprise loss in January and received a $1 billion capital infusion this month a group of investors, including former U.S. Treasury Secretary Steven Mnuchin. (Reporting by Douglas Gillison in Washington; Editing by Nia Williams)