April 13, 2024 / VOLUME NO. 309

Creep of Consolidation 

Rohit Chopra, the director of the Consumer Financial Protection Bureau, worked as an antitrust enforcer in his former life as a commissioner for the Federal Trade Commission. He’s fond of saying rules foster competition. One example: the rule that required wireless companies to port mobile phone numbers to their competitors when a customer chose to switch. In a similar vein, the CFPB’s open banking proposal would give financial institution customers the ability to port their data to competitors. He advocated for that, as well as the idea that additional rules for mergers and acquisitions would foster more competitive markets to combat “the creep of consolidation,” this week at a gathering of antitrust officials in Washington, D.C.

It’s not the first time he’s used the phrase, but Chopra’s words provided some additional context for what’s driving the thinking behind a recent wave of proposed M&A rulemaking coming out of federal banking agencies. Among them, the Federal Deposit Insurance Corp., where Chopra sits on the board, proposed a new set of bank M&A rules last month. The proposed rulemaking would most likely impact smaller bank deals where the FDIC is a primary regulator, but it does mention heightened scrutiny for any deals that would result in an institution above $100 billion in assets. It also would assess the competitive effects of potential mergers on product or customer concentrations, such as residential loan originations or volume of small business loans, not just deposits. 

The Office of the Comptroller of the Currency also proposed new M&A rules recently for the banks it regulates. Editor-at-Large Jack Milligan writes about those rules enhancing scrutiny of national bank deals in an article for subscribers in the latest issue of Bank Director magazine. The OCC on April 10 extended the comment period for its proposed rule by two months, to June 15.

In his remarks, Chopra referenced a shift occurring in Washington when it comes to antitrust regulation. He said antitrust enforcers are no longer a “side dish” but a key part of economic policymaking. Instead of looking at economic textbooks, they’re analyzing real-world impacts of consolidation on customers and workers. “Rather than just lazily assuming bigger is better,” he said, they are approaching their work with a renewed sense of rigor and analysis. “It’s such an important shift that is really underpinning so much of our work,” he added.

• Naomi Snyder, editor-in-chief for Bank Director

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“It’s becoming more and more evident that there’s a large chasm between the large banks and smaller banks in terms of the activity we’re seeing.” ⎯ Robert Fleetwood, Barack Ferrazzano Kirschbaum & Nagelberg

• John Engen, managing editor for Bank Director

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