What You Need to Know
- The legislation is intended to curb mergers that create the kinds of giant institutions that created the 2008 financial crisis, Warren said.
- Of the 3,819 bank merger applications the Fed received between 2006 and 2017, it did not decline a single one.
- The bill would require CFPB approval of deals when at least one applicant offers consumer financial products.
Sen. Elizabeth Warren, D-Mass., and Rep. Jesús “Chuy” García, D-Ill., reintroduced on Thursday legislation to rein in “Too Big to Fail” bank mergers as part of President Joe Biden’s recent competition executive orders calling for increased merger oversight.
The Bank Merger Review Modernization Act would restrict consolidation in the banking industry and protect consumers and the financial system from “Too Big to Fail” institutions, like those that caused the 2008 financial crisis, the lawmakers said.
“In recent years, our banking sector has become more and more dominated by the largest banks,” Warren said in a statement.
“Community banks are being gobbled up by larger competitors or forced to shut down because they can’t compete on a level playing field. This results in more concentration, higher costs for consumers, and increased systemic risk to our financial system,” Warren said.
The bill, García added, “ensures our regulators consider the impacts of a merger on consumers, workers and our financial system.”
The Bank Merger Review Modernization Act, the lawmakers said, would “ensure that regulators do their jobs by stopping mergers that deprive communities of the banking services they need and help prevent another financial crisis.”