Banking is Competitive. Scale Helps It Stay That Way.

Washington, D.C. — The FDIC today released a request for information on the regulatory framework that applies to bank merger transactions. The premise that bank M&A rules and guidance need tightening misses the big picture. With thousands of banks, the U.S. banking system is the most competitive in the world and much less concentrated than other industries serving U.S. customers. In addition, banks already face stringent merger review standards from the banking agencies, which ensures that only mergers meeting high standards in areas like anti-money laundering safeguards and financial stability will pass muster. The FDIC should ensure that it does not undermine the goal of a competitive banking marketplace by denying banks the opportunity to compete with FinTechs on fair terms.

What BPI is saying: “Bank mergers enable economies of scale that support communities, protect consumers from cyber breaches and keep lending costs low,” President and CEO Greg Baer said. “The FDIC should bear in mind that competitive landscape as it seeks information on merger rules and guidelines.”

Why it matters: Banks are facing high costs as they strive to meet consumer demand for seamless apps, robust cybersecurity protection and innovative products and services. They’re competing against FinTechs and Big Tech companies that often have higher market share and less oversight: no on-site examiners, no capital and liquidity requirements and far fewer data privacy restrictions.  Mergers can help banks provide better products and services to both rural and urban areas.  

A deeper look: For more on how bank mergers serve consumers and enable innovation, see BPI’s work here.


About Bank Policy Institute.

The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.

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