Providing for Congressional Disapproval of the Rule Submitted By the Office of the Comptroller of the Currency of the Department of the Treasury Relating to the Review of Applications Under the Bank Merger Act

Floor Speech

Mr. Speaker, I am so pleased that the gentleman from Kentucky (Mr. Barr) referred to me because the big banks hate me. They love him. They support him. They don't support me. Let's see whose side he is on.

As a matter of fact, he is here talking about not being in support of big bank mergers because he is trying so hard to get more community banks. We need more community banks, but he is a long way from getting what he is talking about.

The fact is, we really do need them because of the big bank mergers. One of the things he could do to increase having community banks that relate to the neighborhoods and relate to the people in the communities is to stop allowing these big mergers to take place.

I rise to express my opposition to S.J. Res. 13, a Congressional Review Act resolution that would rescind a rule the Office of the Comptroller of the Currency has put forth to improve their bank merger application review procedures.

Consumer groups, experts, and I have long rung the alarm bell as the Federal Government rubberstamped bank mergers for decades to the detriment of competition. The result has been a growing number of banking deserts where communities lack even one bank branch.

Let's see what happens after a merger.

Mr. Speaker, I want the gentleman to listen to me. I want him to know what happens after the big bank mergers. They close branches. They close down branches all throughout the communities. They lay off the workers. They need less workers, and so they start laying them off. They raise interest rates and fees on their customers.

We lose relationship banking, community involvement, and a personal touch from your neighborhood bank. When these big bank mergers come in, you don't have tellers anymore. As a matter of fact, when they close down the branches, you try to get them on the telephone.

Have you tried to talk with a bank manager on the telephone with these menus that they have? They run you around from so-called extension to extension to extension. You lose all of these relationships.

In fact, while thousands of bank mergers were approved in the last few decades, the last bank merger application that regulators denied was denied in 2003, 22 years ago.

Meanwhile, community banks have disappeared as the number of banks declined from more than 18,000 in 1990 to fewer than 5,000 today. Meanwhile, the biggest banks have grown much bigger through mergers and, not surprisingly, are charging customers more for banking products and services.

For example, the Consumer Financial Protection Bureau found that the largest banks charged between $400 and $500 every year in additional interest and other fees for their average credit cardholders, compared to smaller community banks and credit unions.

In fact, that negative consumer impact is one of the many reasons I and more than 90 percent of public commenters urged regulators to oppose a recent Capital One and Discover merger--I think the gentleman supported that--which created the largest credit card issuer.

The Trump administration approved it anyway, and I know the gentleman from Kentucky (Mr. Barr) did what Trump wanted him to do.

We already have enough megabanks with too much corporate power. In the mid-1990s, the 20 largest banks held 15 percent of all bank assets. Today, they hold more than 65 percent of all bank assets. The four largest megabanks hold more assets than the next 75 largest banks combined.

These megabanks are too big to manage. Take Wells Fargo, for example. They grew larger through mergers and then repeatedly violated the law and harmed millions of consumers. It got so bad that the Fed, under former Chair Janet Yellen's leadership, imposed an asset cap that remains in place to this day.

That is not easily done. Mr. Speaker, you don't hear Treasury doing that, placing asset caps, but they did that because of the way that Wells Fargo bank had just mismanaged and disregarded its customers.

To curb these rubberstamped mergers, former President Biden issued an executive order to encourage the Department of Justice and the banking agencies, including the OCC, to strengthen their merger reviews--get more information and find out what they intended to do and how they were going to provide more services.

That is what President Biden tried to get done with the OCC, to get more information. Don't just rubberstamp them. Let them merge, and do all the things that I have just alluded to.

After going through a public notice and comment process, the OCC, which oversees most large banks, including the four largest commercial banks in the country, published a final rule last year that made several commonsense improvements to its merger review procedures.

First, it eliminated a fast-track procedure where even the largest bank mergers could receive automatic approval of their mergers 15 days after their public notice comment period closed.

Second, the OCC required merger applicants to file the standard merger application to ensure they had enough information to weed out harmful mergers.

Third, the rule provided guidance, something industry often asks for. Specifically, the OCC provided guidance on how they would consider statutory factors when reviewing an application, making the process more transparent.

Rolling back these reforms is dangerous, especially at a time when DOGE is firing staff at the OCC and the other bank agencies, making it harder for them to carefully review these mergers.

I guess Elon Musk didn't stop with all of the other agencies that they were undermining and firing and laying off. They decided that they would fire staff at the OCC and the other bank agencies, making it harder for them to carefully review these mergers.

What Elon Musk was doing is consistent with what he has been doing and I guess what Trump wants him to do. They want less services. They want to make sure that they are supporting the biggest banks with these mergers, the biggest banks that are going to close down the community relationships that we have with community banks.

Moreover, I do not know why Republicans rushed this bad resolution to the floor, bypassing a committee markup. That would have been prudent. As I would point out, this resolution is actually a giant waste of time, as it would rescind a rule that was already rescinded by the OCC.

You heard me right. President Trump's Acting Comptroller of the Currency rescinded this very rule last week when it issued an interim final rule that took effect on May 15.

I am not surprised that my Republican colleagues weren't paying attention to this development, or maybe they were. Maybe they think that it was something that Trump had said to Elon Musk: Go get it done, an executive order. Maybe they felt that this was one of those executive orders that would get ruled out by the courts when we absolutely oppose him.

This resolution is only moving because Republicans needed to waste time while they hammer out how best to give $5 trillion in tax breaks to billionaires. They needed more time to figure out if tens of millions of Americans would lose Medicaid, whether millions of children would lose access to food stamps, and just how many consumer watchdogs they would fire at the Consumer Financial Protection Bureau. It doesn't matter that the United States bond ratings were downgraded, that foreign investors are dumping U.S. investments, or that small businesses are struggling to keep their lights on.

No, Republicans are instead rescinding a rule that Trump already rescinded. I tried to give them credit for why he might be doing this, but what they have done is they have just disregarded that it has already been done. They came over to waste some time, just to make sure that that executive order perhaps won't work.

Much later tonight, when the rest of America is sleeping, Republicans are going to figure out just how many Americans they can squeeze to pay off their billionaire overlords.

Mr. Speaker, this is a bad resolution being considered under the worst circumstances. I don't know why we are wasting time on this floor. I urge Members to reject this wasteful, harmful, anticompetition resolution.

When I talk about rubber-stamping, oftentimes people don't really know what we are talking about. What I am saying is that we need to have better review. The OCC needs to be able to do everything possible to ensure that they know what these big banks are going to do and whether or not they are going to close down branches, whether or not they are going to lay off people, whether or not people are only going to be able to go to their telephone, to the internet, and somehow try to get someone to talk to.

Let me tell you what the definition of rubber-stamping is. In 2023, the OCC approved--you won't believe this--22 of 23 mergers within 60 days. That is 95 percent done in 2 months. Now, that is what you call rubber-stamping. That is what you call the big businesses, big banks being able to do whatever they want to do. All they have to do is get individuals like my friend on the opposite side of the aisle to stand up and support them with what they want to do.

Again, I will remind you that when these big mergers take place, they lay off people, and they close down branch banking. That is why we have what we call deserts that exist in communities; deserts because there is no branch banking. The big boys don't really care about branch banking. They are big, and they are doing exactly what I have indicated by making more money by laying off more people, having less services, and charging larger interest rates. I am not on the side of big banks. I am on the side of the people.

Let me continue. The Republicans may claim this resolution also prevents the OCC from updating its merger review procedures in the future. Why would they want to do that with just one banking agency? Perhaps they forgot that we have two other Federal banking agencies, the Federal Reserve and the Federal Deposit Insurance Corporation. Not only will this resolution freeze the OCC's review procedures in time and arguably prevent them from even providing guidance to applicants on how their review procedures work, but it allows other Federal bank regulators, the FDIC and the Federal Reserve, to update their procedures.

This would likely lead to regulatory arbitrage, where banks seek to merge with banks within a charter where the primary regulator has the weakest review standards.

In fact, we saw this kind of arbitrage in the lead-up to the 2008 global financial crisis when the weakest banks would seek to get a charter from the weakest regulator, the Office of Thrift Supervision, OTS, until their banks failed and Congress shut down the agency in 2008.

Mr. Speaker, we tend to come to the floor when we are producing legislation, and we talk about a lot of ways that bills have to go through different kinds of discussions, different kinds of meetings, et cetera. Oftentimes, the people don't really understand what we are saying when we talk about things like mergers, and we talk about the OCC and we talk about review and all of that.

Let me just try and talk about it in ways that people understand.

First of all, I have said and I stand by the fact that with these big bank mergers, they close down branch banking. They close down the banks in the communities. Why do they do that? They do that because they want to save money. Yet, what happens when they close down the bank?

Mr. Speaker, in many communities and in my own community, when banks were closed down, all you had was the ATM. You didn't have anybody you could talk to. When people go to the bank and they only have the ATM, what do you do when you want to talk about an automobile loan? What do you do when you want to talk about a mortgage? Who do you talk to? Who answers questions about the credit cards and about things that show up on the credit card that you don't know about? Who do you talk to?

Mr. Speaker, I don't know who you talk to. You sure can't ask the ATM about that. The ATM cannot give you the kinds of services that branches give you. The reason branches were there in the first place are when you have these big bank mergers that close down the branch bankers.

Mr. Speaker, I will elaborate on an earlier point that I made. We have seen how the largest banks have grown too big to manage through these bank mergers and then repeatedly broke the law and harmed their customers.

For example, a few years ago, when I chaired the Committee on Financial Services, we investigated Wells Fargo after they were found to have engaged in a pattern and practice of violating the law.

The bank illegally repossessed servicemembers' cars. They failed to submit a credible living will. They overcharged small business retailers for credit card services. They flunked their Community Reinvestment Act exam. They discriminated against people of color who were seeking mortgage loans.

To top it off, they pressured their employees to cross-sell their products, which led to the creation of millions of fake accounts without customers' permission so that staff could reach unrealistic sales goals.

Mr. Speaker, I don't think my colleague on the opposite side of the aisle would want to challenge me on that because that is why we fined them when we discovered what they had done.

Can the Speaker imagine a huge bank like Wells Fargo, too big to manage, having all of this unlawful activity and leading to the creation of millions of fake accounts without customers' permission so that staff could reach these unrealistic sales goals? This is unbelievable, but this is what happened. My colleagues on the other side of the aisle know that this happened, and they know what we had to do with Wells Fargo.

As a matter of fact, it was after all of this revelation about these unlawful activities that we were able to at least help get rid of some board members and the CEO. They all had to go.

Yet, this is what happens when you allow big, big banks to keep merging. They are too big to manage, and they give up on customer service that branch banking is all about. I bring that to the Speaker's attention so that I could make my colleagues on the other side of the aisle remember what happened with Wells Fargo.

Wells Fargo was originally founded in 1852, and it grew, in part, through several bank mergers, including a 1998 merger with Northwest and an acquisition of Wachovia during the 2008 financial crisis. Wells Fargo became one of the biggest banks and the tenth largest public company in the world based on sales, profits, assets, and market value.

Yet, in our investigation, we learned that a senior official at Northwest had an aggressive cross-selling and product sales strategy, and he brought that approach to Wells Fargo. This strategy was adopted and spread throughout the business, including to former Wachovia branches and retail bank operations that Wells Fargo acquired.

Wells Fargo's CEO, John Stumpf, was fully aware that Wells Fargo's focus on this cross-selling combined with aggressive sales goals and associated incentive compensation plans could encourage employees' gaming and create compliance problems.

The bank was fined again and again until, in 2018, I pushed the bank regulators to use their full toolkit to hold a repeat offender like Wells Fargo accountable. The Federal Reserve, under former Chair Janet Yellen's leadership that I mentioned earlier about putting a cap on assets, used one of the tools regulators rarely use--and I repeat: Rarely is this used--to impose an asset cap on the bank until the bank cleaned up its act.

What it said basically was: You can't keep doing this and making money. You can't keep doing this and profiting off of the backs of your customers. You can't keep doing this and getting richer and richer, and so she put an asset cap on the bank until the bank cleaned up its act. That cap remains in place 7 years later.

Mr. Speaker, I hope Members will think of our constituents, including the servicemembers, the seniors, the students, the veterans, and our neighbors that Wells Fargo harmed when deciding if we could make bank mergers easier. If my colleagues do, they will vote ``no'' on this harmful resolution.

Mr. Speaker, as we consider whether we should make the approval of bank mergers easier, I have another example of how mergers have led to major problems.

In 2020, the Federal Reserve and the OCC fined Citigroup $400 million over serious ongoing deficiencies relating to its risk management systems.

Now, this is very, very important. Every bank must have risk management but when they get too huge not only do they not have the proper risk management, it doesn't work very well. It was a longstanding issue that Citi had after they went through a series of mergers in the 1990s.

When the 2020 fine of $400 million was imposed, there was an article in The Wall Street Journal that explained how mergers harm the bank. They wrote: ``Regulators have long fretted that the hodgepodge of systems, a legacy of a string of deals in the 1990s that turned Citigroup into a financial powerhouse, could make the bank vulnerable to costly and potentially damaging missteps.''

They were too big to manage.

``A recent high-profile error--Citigroup's accidental $900 million payment to creditors of cosmetics company Revlon, Inc.--gave credence to their concerns.''

That is right. The bank lacked sufficient controls because of its past mergers--too big to manage--and accidentally paid $900 million to Revlon, which quickly went into litigation.

The bank did not correct their problems. Regulators fined them again last year, but earlier this year, we learned that Citibank made another big payment error. The bank--I love this one--intended to pay a customer $280 but someone accidentally added way too many zeros to the transaction. For 90 minutes before an employee caught the mistake, one lucky customer had $81 trillion credited to their account. Unfortunately, for that customer, the bank corrected their error and far too often these kinds of mismanagement mistakes actually lead to harm for consumers.

In fact, since 2000, Citigroup has paid over--listen to this--$27 billion in fines, settlements, and consumer remediation, including 42 actions related to consumer protection violations. This includes discriminating against Armenian-American credit card applicants, overcharging other credit card holders, and mortgage servicing violations that could have helped homeowners avoid failure.

Again, this is the logical conclusion if we have faster mergers. We will have fewer and fewer banks that are bigger and bigger and, indeed, too big to manage.

Let me just say: When I said how much they had been fined just a moment ago, Citigroup, one could think how could they be fined that much money? How can they afford it? Where do you think they got that money from? Where do you think that money came from? Why do you think that doesn't matter to the big banks? It is just a matter of doing business.

Do you know where that money comes from? It comes from the customers. That is why we have to make sure that the customers are serviced properly, that when a big merger wants to have support from the government, that they will have been vetted in such a way that OCC understands very well: How are you going to service these customers? Are you going to close down these branch bankers? How are you going to help somebody that is looking for a mortgage? What are you going to do to the person that can't talk to the ATM because they are trying to get a car loan?

These are legitimate questions. These are legitimate answers that need to be given.

I will say this: The money does not fall out of the sky that allows them to pay millions and millions of dollars in fines. It comes from charging the customers, increasing interest rates, laying off employees so you have less employees to pay, and the services get worse and worse and worse.

The customers are the victims of these big mergers who do not want to be reviewed properly and who you support in not wanting to be reviewed properly.

Mr. Speaker, I am just sitting here being absolutely shocked by some of my own words when I take a look at the fines that we have charged both Citi and Wells Fargo. I see that each of them have paid $27 billion in fines, but they are still in business. Do you know why? It is because they make so much money. This is just the cost of doing business. We break the law. They are going to fine us, but we can afford it. We will go on doing what we do. This is what happened with the big, big banks that you allow to merge without understanding what they are all about and what is their commitment to the consumers.

As a matter of fact, they can afford to pay $57 billion in fines, money that they have collected from their customers. They only see this as the cost of doing business, and they keep on doing business, keep on getting fined. What are we talking about?

Listen, I am not opposed to credible mergers. Democrats just want mergers that result in a bank that will follow the law and serve the community. We want to make sure that they have the systems in place and the management to follow the law. Why? Because the consumer is on the hook and the taxpayer is on the hook; that is why.

Mr. Speaker, I want my colleagues to know that I have not talked to anybody recently who was happy with their bank. They have problems getting services because the banks keep cutting back on employees and trying to push everybody to the ATM.

We can do better than this. We can understand when the mergers want to take place, who these entities are that want to merge, how huge this is going to make this bank, and what they are going to do about branch banking.

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Ms. WATERS. Mr. Speaker, on that I demand the yeas and nays.

The yeas and nays were ordered.

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