WASHINGTON — House Republicans teed up a number of bank merger policy bills on Wednesday in a hearing that took aim at regulators' updated policies regarding M&A activity, though bipartisan support for making those reforms appears limited.
The House Financial Services Subcommittee on Financial Institutions and Monetary Policy, chaired by Rep. Andy Barr, R-Ky., had three bills on the discussion agenda. The first bill, proposed by Barr, would aim to shorten the amount of time that banks wait to hear back from regulators on their merger applications. The other two look at regulatory burden from the Consumer Financial Protection Bureau, which Barr said are "part of the onslaught of confusing and misguided regulatory efforts that force mergers as banks need to spread their ever-growing regulatory burden over additional business activities."
Republicans also criticized new guidance documents from the
"With varying proposed conditions for merger approval, the FDIC, OCC, and the Fed would be operating with different approval processes and standards, injecting additional uncertainty, incentives for regulator shopping, and negative consequences for the dynamism of our banking system," Barr said.
The Bank Policy Institute, a trade group of large and midsize banks, in a comment for the record to the subcommittee said that the new agency guidelines could chill bank deal activity.
"These proposed changes would, in the most favorable case, discourage merger transactions involving large banks, and in the worst case, prevent them altogether," the group said. "We are concerned that these recent actions by the OCC and FDIC would in effect preclude many beneficial bank merger and asset acquisition transactions, and, even for those that would not be precluded, the proposals would heighten rather than reduce uncertainty relating to the overall review process and the likelihood of approval."
While cracking down on regulators reconsideration of their merger policy is mostly a Republican concern, some Democrats conceded that their Republican counterparts had a point.
"Both the FDIC and OCC are currently accepting comments on these proposals that I encourage the regulators to actively engage with the comments they receive," said Rep. Bill Foster, D-Ill., ranking member of the subcommittee.
Foster also questioned the regulators on whether they have a formal, quantitative process for reviewing deal activity, or if the process is more judgment-based.
Not all Democrats signaled openness to Republicans' ideas about bank merger reform. Rep. Maxine Waters, D-Calif., the ranking member of the full House Financial Services Committee, said that she's led 15 Democratic lawmakers
"As bank mergers continue to be rubber stamped by bank regulators, people across America pay the price through higher junk fees and predatory actions," she said.
