House Banking Committee Chairman Henry B. Gonzalez, D-Tex., last week said his panel will conduct a series of hearings to examine the potential impact on the economy of "new mega-buck mergers" in the banking industry.
"The face of the financial system is changing drastically as major banking corporations consolidate and it is incumbent on this committee to determine what these developments will mean for businesses, communities, and consumers," Rep. Gonzalez said.
The announcement earlier this month that Bank of America and Security Pacific National Bank would merge was the latest in a string of mergers uniting some of the nation's largest and most powerful banking firms. The mergers are being lauded by bank managers as a means of boosting efficiency and slashing operating costs.
Rep. Gonzalez said he will explore the "potential for adverse effects on bank customers and local economies, noting, "Concentration of financial resources creates a real danger of higher costs, fewer choices, and diminished services for small- and medium-sized businesses and consumers."
No dates for the hearings have been released.
The Resolution Trust Corp., seeking to stem criticism of its handling of the savings and loan crisis, recently issued a fact sheet touting the agency's accomplishments in sopping up the thrift industry's red ink.
Since swinging into action two years ago, the agency says it has seized 638 insolvent thrifts and completely resolved 489 of those cases. The agency estimates that by the end of September it will have resolved 557 failed thrifts, an average of one every 33 hours.
The RTC says it had sold or liquidated $159 billion of the $327 billion of assets it had inherited from dead thrifts as of May 31. To accelerate sales, the agency has placed $25.3 billion of assets under private management and is seeking contractors to handle another $10.3 billion.
Moreover, the agency says that since October 1988, there have been 573 convictions for major thrift crimes, resulting in more than $270 million in fines.
Such statistics are unlikely to provide the RTC with political cover on Capitol Hill, however. Lawmakers have continually pilloried the agency because of their perception the RTC is moving too slowly.
Congress is considered likely to approve measures designed to streamline the RTC's operations when it votes to provide the agency with additional money this fall to continue the industry cleanup.