Sen. Jack Reed, D-R.I., sent the Treasury Department and banking regulators a letter last week raising concerns over letting private-equity firms purchase failing banks.

In a letter to Treasury Secretary Timothy Geithner, Federal Reserve Board Chairman Ben Bernanke, Federal Deposit Insurance Corp. Chairman Sheila Bair and Office of Thrift Supervision Acting Director John Bowman, Reed cited the private-equity takeovers of Flagstar Bank and BankUnited and asked regulators for a consistent policy on whether such purchases make sense.

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