The Washington Post: The finance 202: The biggest bank merger since financial crisis is on table today in Congress
The Washington Post, July 24, 2019: The finance 202: The biggest bank merger since financial crisis is on table today in Congress
SunTrust and BB&T’s $60 billion merger, which would create the country’s sixth-largest bank, will face its biggest test yet Wednesday when the banks’ CEOs face off against skeptics in the House.
During a hearing before the House Financial Services Committee — “The next megabank: Examining the proposed merger of SunTrust and BB&T” — the banks are preparing to defend their merger plans as an opportunity to increase their investment in local communities.
A few weeks before the hearing, SunTrust also announced it would cut business ties with private prison and detention center companies, heading off potentially tough questions from progressive lawmakers, particularly committee member Rep. Alexandria Ocasio-Cortez (D-N.Y.). The bank has already spent more than $1.05 million lobbying during the first half of this year, according to data from Open Secrets. BB&T has increased its spending on lobbying by 8% to more than $534,000 so far this year, according to Open Secrets.
Last week, the banks said they had reached a deal with community groups to increase their lending and investment in low- and moderate-income customers to $60 billion over the next three years, addressing another likely Democratic concern.
“The banks didn’t do everything we wanted,” said Jesse Van Tol, chief executive of the NCRC, a research and advocacy coalition of 600 community organizations that promote economic and racial justice, but “I wouldn’t have agreed to it, if I didn’t think it was a good plan.”
This comes at a time when the banking industry is entering what Jamie Dimon, chief executive of JPMorgan Chase, the country’s largest bank, has called a “golden age.” The industry is reporting record profits, and the Trump administration has scaled back many of the toughest post-crisis regulations. If the merger is approved, it could open the way for other larger mergers, industry analysts have said.