Bank mergers, already buoyed by Trump-era policy changes, just got another green light from the White House.
President Donald Trump on Wednesday night revoked a Biden-era executive order that
Because certain M&A policies have
Shayna Olesiuk, director of banking policy at consumer advocacy group Better Markets, said that Biden's executive order hadn't seemed to hold back bank deal activity this year, but also that rolling back the action will continue to pave the way for less scrutiny of bank deals.
"We've already seen, in the last six months, the path toward reducing some of the scrutiny that we had previously around bank mergers," Olesiuk said. "And I think the bottom line really is that bank mergers need to be scrutinized, and there needs to be oversight to ensure that consumers' interests and the public interest are not sacrificed for Wall Street's profits."
Already this year, the Federal Deposit Insurance Corp. has rolled back bank merger guidelines from 2024 that had enhanced scrutiny, reinstating prior standards for deal supervision. Congress also voted in May to nullify the Office of the Comptroller of the Currency's 2024 bank merger guidance, which would have eliminated expedited reviews of deals, a rollback that was finalized by President Trump this summer.
Despite some initial predictions that Vice President JD Vance's prior support of former Chair of the Federal Trade Commission Lina Khan, who stepped down when Trump took office, signaled an interest in continuing tougher antitrust enforcement, the administration hasn't laid the hammer down on anti-competition issues.
Khan's successor at the FTC, Andrew Ferguson, said in a statement Thursday that the 2021 executive order was part of the Biden administration's "undue hostility toward mergers and acquisitions."
"Today's withdrawal of the Biden-Harris Executive Order on competition marks another break between the last Administration's failed policies and the Trump-Vance Administration's focus on protecting everyday Americans from anticompetitive practices through tailored action, promoting economic growth, and ensuring that American workers benefit from competition for their labor," Ferguson said.
One result of the recent regulatory rollback is the demise of reviews of deals' impact on financial stability. As part of the 2024 revisions to M&A guidance, regulators had been explicitly asked to conduct such reviews.
Olesiuk argued that the Trump administration's posture on M&A could result in consumer harm.
"There's lots of research out there that shows that bigger banks charge higher interest rates to consumers on credit cards, for example," Olesiuk said. "I think there's clear evidence that consumers are going to be disadvantaged."
Still, there's a difference between large banks absorbing each other and community banks combining forces to gain strength, she said.
Factors like sleepier economic growth, population declines and a lack of succession plans are driving smaller banks to sell, which could lead to better outcomes for the communities they serve, Olesiuk said.
"This is why we need scrutiny on mergers, because mergers of community banks could be very helpful to a community," she said. "But without that scrutiny, we lose visibility and protections for Main Street."
After a frothy 2021, bank transactions cooled off for a couple of years, in part because the interest rate environment made deal-math less attractive. But 2025 could mark a rebound for banks looking to buy and sell.
There have been more than 100 transactions between banks so far this year, and the 26 deals logged in July marked the highest number in a single month since June 2021, according to data from S&P Global.
In addition, bank deals during the second Trump administration have been approved at a far faster pace than was happening during the Biden years.
Notably, after more than a year of review, the OCC and Federal Reserve Board
