DOJ antitrust unit considers overhaul of bank merger review process

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WASHINGTON — The Department of Justice’s Antitrust Division is considering a revision of its bank merger review process "to reflect emerging trends in the banking and financial services sector," the department said Tuesday.

"Innovative emerging technologies are disrupting traditional banking models and introducing new competitive elements to the financial sector," Assistant Attorney General Makan Delrahim said in a press release.

The Antitrust Division is inviting public feedback before it commits to an overhaul of its existing process for reviewing bank mergers, which has not been updated significantly since 1995. In August the Justice Department announced it would reorganize the Antitrust Division to create a single office dedicated to reviewing financial mergers.

"The new financial services-focused section will build expertise across the waterfront of fintech, making it well positioned to understand how new entrants in these areas may spur competition with and among traditional players," Delrahim said in a speech last month by videoconference at an event hosted by Stanford University.

The Justice Department's Antitrust Division is inviting public feedback before it commits to an overhaul of its existing process for reviewing bank mergers, which has not been updated significantly since 1995.
The Justice Department's Antitrust Division is inviting public feedback before it commits to an overhaul of its existing process for reviewing bank mergers, which has not been updated significantly since 1995.

In its announcement Tuesday, the Antitrust Division indicated it would seek broad feedback on the bank merger review process, including on whether the industry would benefit from “greater clarity” about how the review process overlaps with more recent antitrust guidance from the Federal Trade Commission.

The request for comment asked whether the Antitrust Division should include nontraditional online banks in its analysis of competitive effects, in addition to whether the office gives “appropriate weight to online deposits” as well as “credit unions and thrifts” in its analysis.

The Justice Department also asked stakeholders whether it would be “helpful to have joint guidance from the Antitrust Division and the banking agencies" — the Federal Reserve, Office of Comptroller of the Currency and Federal Deposit Insurance Corp.

The division appeared open to updating core geographic components of the Justice Department’s antitrust review process for bank mergers as well. In addition to asking whether regulators should reconsider the use of geographic markets defined by the Federal Reserve, the Antitrust Division asked stakeholders how it should weigh “the dynamics of rural and urban markets” differently.

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