WASHINGTON—Comptroller of the Currency Michael Hsu is signaling the OCC will be giving more scrutiny to bank mergers, and he has directed the agency to work with the Department of Justice (DOJ) and other banking regulators to review merger frameworks.
“From my perspective, the frameworks for analyzing bank mergers need updating. Without enhancements, there is an increased risk of approving mergers that diminish competition, hurt communities, or present systemic risk,” Hsu said in prepared remarks during an event at the Brookings Institution, Pymnts.com reported.
Bank merger regulation has been in the spotlight since President Joe Biden issued an executive order in July 2021 ordering federal agencies to promote competition in different sectors of the economy, including how more concentration could affect the banking sector, Pymnts.com noted.
What Would be Required
Pymts.com added that to this end federal agencies and lawmakers have proposed new rules and legislation. Last year, Sen. Elizabeth Warren (D-MA) introduced the Bank Review Modernization Act of 2021, which establishes additional requirements for bank mergers and acquisitions.
The proposed bill, if approved, would require the Consumer Financial Protection Bureau to approve a merger when one of the companies offers consumer financial products. It would also require regulators to examine the anticompetitive effects of the deal.
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