Sen. Brown: OCC ‘should do extra’ on financial institution merger evaluation

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Senator Sherrod Brown, D-Ohio.
Sen. Sherrod Brown, D-Ohio, despatched a letter to the Workplace of the Comptroller of the Foreign money and Federal Deposit Insurance coverage Corp. demanding the companies’ proposed amendments to its financial institution merger evaluation extra vigorously scrutinize mergers between or together with massive banks.

Bloomberg Information

WASHINGTON — Sen. Sherrod Brown, D-Ohio, chairman of the Senate Banking Committee, mentioned in a letter to appearing Comptroller Michael Hsu that his company ought to replace its financial institution merger evaluation proposal to be extra stringent. 

The Workplace of the Comptroller of the Foreign money earlier this yr launched a proposal revamping how the company evaluations financial institution mergers, together with nixing a timeout clause on how lengthy the company can take to evaluation a merger utility. Whereas the proposal would enable the OCC to intensify scrutiny on proposals, progressive lecturers and policymakers have mentioned that it would not go far sufficient. 

Simply a short while later, the Federal Deposit Insurance coverage Corp. launched its personal assertion on financial institution coverage merger transactions that, in contrast to the OCC model, contains extra scrutiny for banks with property over $100 billion. It is one of many points {that a} potential incoming new chair —  ought to Brown usher by means of Christy Goldsmith Romero’s nomination — would want to finalize within the quick time that particular person leads the company. 

Brown, in a letter to Hsu, mentioned that mergers involving bigger banks ought to “routinely set off enhanced scrutiny.” He cites Capital One’s proposed acquisition of Uncover as a primary instance, saying that the deal “calls consideration to an undefined area” within the OCC’s proposal — the remedy of mergers that may create an establishment with greater than $50 billion in property.

“It’s crucial that the Coverage Assertion clarifies that transactions undertaken by massive, non-[Global Systemically Important Bank] establishments would additionally increase supervisory or regulatory considerations,” Brown wrote. 

Though Brown mentioned he helps the final course the OCC is heading with eradicating the timeout clause, he took a much less important tone in the same letter to FDIC chair Martin Gruenberg on that company’s financial institution merger proposal. 

Brown additionally pressed Hsu on more durable necessities for banks on the subject of reviewing a merger’s affect on the encircling group. His feedback are half of a bigger push by the Biden administration in antitrust coverage to more and more take into account the broader affect of a merger or acquisition on the financial system, quite than narrowly contemplating competitors. 

“On the subject of essential points like potential job losses and different elements that have an effect on Individuals’ entry to banking companies, the OCC should do extra than simply give these points some thought,” Brown mentioned. “The OCC should solely approve mergers the place it will probably determine how a proposed transaction is attentive to the entire of a financial institution’s communities’ wants, together with these of each its clients and staff.” 

The OCC “begins to deal with these points,” Brown mentioned, however “it should go farther.” 

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