NEW YORK—Bank mergers are occurring faster under the Trump administration; a new report indicates.
Mergers are moving quicker because federal regulators have changed some of the policies that deterred deals after the financial crisis, reported Forbes.
“Recently, the wait time in both the Federal Reserve and the OCC has dropped dramatically. At the beginning of 2018, the Fed was approving mergers in 3.8 months and the OCC 1.9 months, significantly less than the 5.6 months and 2.6 months respectively both took during the same time period in 2017. Both groups attribute streamlined internal steps as the reason for the faster approvals,” Forbes said.
“Critics say that the mergers are not getting their due level of scrutiny and that some mergers could potentially hurt competition and make banks less available to those in rural areas,” stated Forbes.
‘Anemic Scrutiny’
Democratic presidential hopeful Sen. Elizabeth Warren (D-MA) recently sent a letter to Fed Chairman Jerome Powell saying the “anemic scrutiny of applications for mergers and acquisitions raises concerns that [it] may oversee a wave of bank consolidation to the detriment of consumers and the financial system,” noted Forbes.
“Typically bank mergers are reviewed by both the Federal Reserve and Office of the Comptroller of the Currency. Those reviews can often take a long period of time for mergers that involve stocks. When those reviews take a long period of time, the market can potentially move and make the deal less beneficial for one of the companies, prompting them to back out,” noted Forbes.
As CUToday.info reported, two large regional U.S. banks recently announced plans to merge. BB&T and Atlanta-based SunTrust said they plan to combine to create a $442-billion institution that would be the sixth-largest U.S. bank based on assets and deposits.