Roll Call, October 13, 2020, Fintech Boom Prompts Justice To Revisit Bank Merger Guidance
The Department of Justice (DOJ) antitrust division is deciding on reevaluating the 25 year standing on bank merger guidelines due to the new financial capabilities regarding technology. The DOJ has turned to the public to gauge whether they should include “nontraditional banks” when considering the competitive effects of a proposed bank merger. The consideration of changing these long standing rules within the financial world has garnered much criticism from both sides of the argument.
This is a problem for community banks particularly in rural areas because additional scrutiny may discourage mergers that result in a stronger financial institution that is better able to meet compliance burdens,” Mickey Marshall, the Independent Community Bankers Association’s regulatory legal affairs director, said in an email to CQ Roll Call. “When the guidelines were first introduced in 1995, the internet as we know it did not exist.”
He said including online banks in bank merger analysis “would better reflect the competitive landscape that small banks actually face.”
Antitrust regulators acknowledge the shifting landscape.
“Innovative emerging technologies are disrupting traditional banking models and introducing new competitive elements to the financial sector,” Makan Delrahim, assistant attorney general for the antitrust division, said in his call for comments. “As part of the division’s increased attention to modernizing our competitive analysis of financial services markets, we are examining whether the 1995 Banking Guidelines need updating to reflect our evolving economy.”
