Introduction of the Bank Merger Review Modernization Act

Floor Speech

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Mr. GARCIA of Illinois. Madam Speaker, I rise today to support the Bank Merger Review Modernization Act.

When big banks get bigger, consumers and taxpayers usually end up losing.

Unprecedented concentration in the banking sector is hurting consumers, who pay more for critical financial services when their banks are merged out of existence. Since the 1980s, consolidation has swept the banking industry, with the number of FDIC-insured banks in the United States dropping from more than 15,000 in 1984 to less than 5,000 in 2018. Numerous studies have shown that bank mergers are associated with higher costs of credit, reductions in lending, and decreases in small business formation and local property prices.

Concentration in the banking sector also poses risks to financial stability. A wave of bank mergers by Bank of America, Citigroup, JPMorgan, and Wells Fargo in the late 1990s created the ``too-big-to- fail'' banks that became so central to the 2008 financial crisis.

Rather than scrutinizing the considerable risks that bank mergers pose, the regulatory agencies tasked with reviewing these mergers have increasingly ``rubber stamped'' them. Bank merger approval rates are at historic highs.

Last month, the Federal Reserve and FDIC approved the largest merger since the crash when they gave the green light to the merger between BB&T and SunTrust.

I am concerned that the reviewing agencies are not giving adequate attention to the systemic risks that these giant megabanks pose. I am also concerned that the considerable harms to consumers are not being considered when mergers are reviewed. The Bank Merger Review Modernization Act strengthens the bank merger review process to give the CFPB and consumers a voice, and to require that the systemic costs of too big to fail institutions are taken into full account.

I urge this body to curb the creation of too big to fail banks and pass this bill.

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