Washington, D.C. – The sale of First Republic Bank to JPMorgan Chase this weekend has highlighted the urgency of strengthening guardrails around Wall Street megabanks while also laying the groundwork for a longer-term effort to reduce concentration in the banking sector.
Amid growing concern about corporate consolidation, the Center for Responsible Lending (CRL) and Americans for Financial Reform Education Fund are leading a letter calling for the Federal Reserve and the Office of the Comptroller of the Currency (OCC) to reject a proposed merger between TD Bank and First Horizon Bank.
AFREF led a letter to regulators stating that the laissez-faire stance adopted by the Department of Justice and the federal bank regulators and current merger guidelines have hurt small businesses, community banks, and households, especially those in BIPOC communities. The letter urges regulators to temporarily halt consideration of pending bank mergers until the DOJ and banking agencies adopt a plan that strengthens the guidelines to protect consumers.
Americans for Financial Reform welcomes the FDIC’s action on reviewing bank mergers. In the last 15 years, the federal bank regulators have rubber-stamped merger applications. This has led to unprecedented consolidation in the industry which has hurt consumers and small businesses, in the form of bank deserts and decreased lending to small businesses while lining the pockets of the banking executives. We look forward to commenting on ways to strengthen the bank merger guidelines to protect the interest of the communities they are supposed to serve.
The Department of Justice upheld the rule of law in its recently published opinion on the ability of the chair of the Federal Deposit Insurance Corporation to block votes sought by the majority of its board.
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Private equity funds could access government assistance for their portfolio companies while avoiding any responsibility to repay any debt or obligations to the public purse. Private equity firms could also tap government aid to finance leveraged buyout purchases of additional companies, using public money to load target companies with debt and drain their assets while avoiding any responsibility for paying that debt back.
AFR Education Fund released the following policy memo analyzing the Federal Reserve’s unprecedented move to provide direct credit to states and localities. A pdf copy of the memo is available here. Review of New Federal Reserve Facilities On April 9th the Federal Reserve announced six