WASHINGTON–The federal government is providing new direction around its efforts to place greater scrutiny on bank mergers.
In remarks to the Brookings Institution’s Center on Regulation and Markets’ “Promoting Competition in Banking” event, Assistant Attorney General Jonathan Kanter offered a follow up to President Biden’s wide-ranging executive order that highlighted the need for increased competition banking.
Meanwhile, the DOJ, along with a trio of regulators — the Federal Reserve, FDIC, and Office of the Comptroller of the Currency — is in the process of updating bank merger guidelines from 1995, noted the Washington Post.
“The revamp first kicked off at the DOJ during the Trump administration, with the department seeking comments on how to update the 1995 guidelines,” the Post reported. “The DOJ under Biden sought a new round of comments in late 2021.”
Narrow Focus is ‘Inadequate’
In his remarks, Kanter said the “narrow focus on local market deposit concentration” is inadequate, and that the current approach “may also disproportionately focus enforcement on transactions involving small local banks and understate network concerns relating to large national and multinational banks,” he said.
Kanter said he wants to revive the DOJ’s practice of issuing deal-specific guidance — known as competitive factors reports — before any decisions are made, something it hasn’t done since 1995, the Post reported.
The department would also still be able to challenge deals approved by banking regulators under antitrust laws.
Kanter told the meeting that independent regulators themselves are better positioned to determine which branches might cause competitive problems “informed by their unique supervisory experience and powers,” according to the report.
Looking Forward
Kanter added that going forward, the DOJ will look, for example, to ensure that customers have the ability to choose among different types of lenders, such as retail banks, small business banks, and large- and mid-size business banks in any transaction.
“Bank competition affects the interest you earn on your savings account, the monthly payment on your mortgage or car loan, the fees you pay to withdraw cash from an ATM, the variety of financial products you can choose from, and whether your business can get an affordable loan,” Kanter said in his remarks.
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