News Release: Federal Authorities Should Halt Bank Mergers Until Guidelines Are Strengthened


Dec. 14, 2021

Carter Dougherty
(202) 251-6700

Federal Authorities Should Halt Bank Mergers Until Guidelines Are Strengthened

The federal authorities should halt all bank merger approvals until they strengthen the outdated guidelines that govern whether financial institutions can combine, according to a letter delivered today by 30 public interest organizations.

The group, which includes financial reformers, anti-monopoly activists, labor unions, racial justice groups, small businesses, and consumer advocates, sent the letter to the Department of Justice and the federal bank regulators. It details the harmful effects bank consolidation has had on consumers and small businesses, especially those in communities of color, including more evictions, increasing rates of debts in collection, and fewer loans supporting economic development. 

“The decades-long hands-off approach to bank mergers has caused visible damage to communities, including banking deserts, limited options for mortgages and even affordable bank accounts, and reduced loans to small businesses,” said Renita Marcellin, senior policy analyst at Americans for Financial Reform. “Antitrust enforcers and bank regulators can halt this trend if they so choose and pausing future mergers until they reform the merger guidelines would be an important first step.” 

A copy of the letter is here.

The letter calls for the federal agencies to adopt a plan that strengthens the Bank Merger Competitive Review Guidelines overseen by the Department of Justice to better protect consumers and financial stability before resuming its consideration of new mergers, including the proposed combination of U.S. Bancorp and MUFG Union Bank. If these mergers are indeed good for consumers and small businesses, they can withstand the scrutiny of tougher guidelines. 

A majority of the FDIC board is also seeking to forge a new approach to bank mergers. Rep. Maxine Waters, chair of the House Financial Services Committee, has also called for a halt to mergers while regulators review current practices. Sen. Elizabeth Warren and Rep. Jesús “Chuy” García have also introduced the Bank Merger Review Modernization Act to strengthen antitrust enforcement for banks. All these efforts are important and welcome.