BPI Statement on Bank Mergers Before the HFSC Subcommittee Hearing on the ‘Future of Banking’

Chair Waters, Chair Perlmutter, Ranking Member McHenry, Ranking Member Luetkemeyer and Members of the House Financial Services Subcommittee on Consumer Protection and Financial Institutions:

The Bank Policy Institute welcomes the opportunity to provide comments on the hearing titled The Future of Banking: How Consolidation, Nonbank Competition, and Technology are Reshaping the Banking System.

On August 20th, the Bank Policy Institute published a research note addressing many of the important issues covered by this hearing.  The note, Bank Merger Applications in Law and Practice by BPI staff Paul Calem and Gregg Rozansky, addresses the robust existing regulatory process for bank mergers.  Areas considered by the agencies when reviewing merger and acquisition applications include:

  1. The convenience and needs of the communities to be served and the subject banks’ record of compliance with the Community Reinvestment Act;
  2. The effectiveness of the applicant in combating money laundering;
  3. The financial resources and prospects of the applicant;
  4. The managerial resources and prospects of the applicant; and
  5. Risks to the U.S. banking or financial system (financial stability)

The attached note delves deeper into this process.

Thank you for considering our views.