Re: Request for Comment on Proposed Statement of Policy on Bank Merger Transactions (RIN 3064-ZA31)
On behalf of National Taxpayers Union (NTU), the nation’s oldest taxpayer advocacy organization, thank you for the opportunity to respond to the Request for Comment on Proposed Statement of Policy on Bank Merger Transactions from the Federal Deposit Insurance Corporation (FDIC).
NTU urges you to reject any proposals that would deprive consumers of choices, limit the ability of entrepreneurs to innovate, deny workers and shareholders opportunities to build wealth, confer artificial benefits on competitors, drain capital due to legal expenses, and thwart potential growth in the economy as companies are forced to divert resources and attention to legal battles instead of innovation.
NTU recommends:
- Do not impose new regulations that create uncertainty regarding future bank mergers. New rules should be clear and not impose unnecessary costs on financial institutions.
- Avoid costly new regulations that disadvantage smaller banks and institutions that have less institutional capacity to comply with them.
- Utilize the appropriate market definition when reviewing the competitive impact of proposed bank mergers. For example, the market for loans includes not just banks, but credit unions and nonbank financial institutions.
- New regulations should be nondiscriminatory and not applied in a way that tilts the playing field toward particular types of financial institutions.
- Merger reviews should not begin with either a pro-merger or anti-merger presumption, but should be based on the merits of each proposed merger.
- Mergers and acquisitions between banks and credit unions require special attention. When a tax-exempt institution purchases a bank, that institution is taken off the tax rolls, thereby shrinking the tax base.
Finally, as with other regulators, the FDIC should prioritize the consumer welfare standard as the basis for approving mergers and acquisitions. The interests of consumers in a competitive, free market environment should remain paramount.