FDIC must have full board to rule on BB&T-SunTrust: Sherrod Brown
WASHINGTON — The Federal Deposit Insurance Corp. must have a "full five-member" board in place in order the consider the proposed merger between BB&T and SunTrust, Sen. Sherrod Brown said Tuesday.
The Ohio Democrat, who is the ranking member of the Senate Banking Committee, said in a letter to FDIC Chairman Jelena McWilliams that the "merger cannot be approved until internal directors of the FDIC are nominated and confirmed." In a separate letter to President Trump, Brown called on the administration to "move decisively to nominate a full slate of members to the board."
“A merger of this scale not only increases systemic risk and concentration, but it could also decrease competition,” Brown said in the letter to McWilliams. “Not only must this decision be made by the board, which is directly accountable to Congress, but also a decision of this magnitude deserves consideration by a full five-member FDIC Board."
The combined bank is said to prefer the FDIC as its primary regulator, and the agency currently supervises BB&T. The FDIC along with the Federal Reserve are set to host two public hearings on the merger, with the first to take place Thursday in Charlotte, N.C.
Brown reiterated his concern about the proposed merger coming in the wake of regulatory relief mandated by Congress and implemented by the agencies.
“Legislative giveaways and regulatory rollbacks have already amplified the potential for the biggest banks to threaten our financial system,” Brown said. “Further consolidation by large banks would make matters even worse. … A merger of this scale not only increases systemic risk and concentration, but it could also decrease competition.”
In addition to McWilliams, former FDIC Chairman Martin Gruenberg — a Democrat — retains a seat on the board, but a third inside director's position is vacant. Two other board members are heads of other agencies: Comptroller of the Currency Joseph Otting and Consumer Financial Protection Bureau Director Kathy Kraninger.
Brown asked McWilliams for details on meetings between agency officials and representatives from the two banks, and how the FDIC’s analysis of the competitive effects of the proposed merger compare with the Fed's analysis.
In his letter to Trump, Brown said the FDIC's decisions, including the ruling on the proposed BB&T and SunTrust deal, will have far-reaching consequences for families, community banks and the economy.
“In an environment where there is bipartisan concern over banking industry consolidation and its effects on community banks, the costs and benefits of this merger call for careful scrutiny, and the full attention of a complete FDIC board,” Brown said.