A Federal Reserve Board proposal to reduce the processing time for most merger applications could lead to more protests under the Community Reinvestment Act, members of the Fed's Consumer Advisory Council said Thursday.
Bankers and community activists on the council agreed that if the Fed speeds up application approvals, there might not be enough time to resolve CRA concerns.
Without this window, more community groups would protest mergers, said John Taylor, president of the National Community Reinvestment Coalition.
Members of the council also were concerned that the Fed will not have enough time to review a bank's recent CRA performance. Rather, it would have to rely solely on the institution's last exam, which might be outdated.
Other members criticized the Regulation Y proposal for giving big banks an unfair advantage.
The expedited procedures would apply only if the deal boosts the surviving institution's assets by less than 35%. Big banks could gobble up lots of small banks without running afoul of that restriction, they said, but smaller banks would frequently bump into the cap. - John Shea, Medill News Service