Waters Presses Regulators to Impose Moratorium on Bank M&A Over $100 Billion

Dec 27, 2021Congressional Legislation, Federal Regulation, News

Congresswoman Maxine Waters (D-Calif.), Chairwoman of the House Financial Services Committee, recently sent a letter to the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC), urging them to impose a moratorium on approving bank merger and acquisition (M&A) applications over $100 billion while the agencies conduct reviews.

“Scholars and regulators have written about the need for a stronger framework, including through lowering the concentration thresholds for enhanced scrutiny of mergers, more rigorous evaluation of financial stability risks, and consideration of potential conflicts of interest, which is especially important as a range of markets are becoming more concentrated,” Waters wrote in her letter.

To guarantee that the perspective of small businesses, consumers, bank workers, and underserved communities are heard by large mergers, Waters pressed the regulators to establish a stipulation in their M&A review procedures to always hold public hearings on any large bank M&A applications. She also urged them to consult with the Consumer Financial Protection Bureau (CFPB) and Financial Stability Oversight Council (FSOC) during the process.

“Postponing decisions on pending mergers until the review is complete will help ensure that a regulatory landscape that promotes ‘healthy, vibrant, and competitive banking markets’ that Chair Powell has expressed support for is put in place,” Waters wrote.

Waters pointed out that the Federal Reserve is working with the Attorney General and heads of other banking agencies to ensure its bank merger framework promotes innovation, competition, and consumer choices. The FDIC also recently issued a “Request for Information and Comment on Rules, Regulations, Guidance, and Statements of Policy Regarding Bank Merger Transactions.”

The full text of the letter is available here.

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