Unsurprisingly, big-bank lawyer Thomas Vartanian opposes @SenWarren and @RepChuyGarcia's Bank Merger Review Modernization Act, based on my research.
I want to explain why Vartanian's critiques are misleading, disingenuous, and flat-out wrong. /1
americanbanker.com/opinion/fix-cr…
I want to explain why Vartanian's critiques are misleading, disingenuous, and flat-out wrong. /1
americanbanker.com/opinion/fix-cr…
I've already rebutted the argument that @CFPB doesn't need a separate say on bank mergers b/c it has a seat on the FDIC board.
The FDIC doesn't oversee the biggest mergers. And even if it did, its focus is safety-and-soundness, not consumer protection.
The FDIC doesn't oversee the biggest mergers. And even if it did, its focus is safety-and-soundness, not consumer protection.
Vartanian doesn't want transparency into the secret "pre-screening" meetings banks have with regulators about potential mergers.
But those conversations pre-dispose regulators to approve mergers, tilting the scales in favor of consolidation. Transparency would limit that effect.
But those conversations pre-dispose regulators to approve mergers, tilting the scales in favor of consolidation. Transparency would limit that effect.
Vartanian doesn't want regulators to use systemic risk limits based on quantitative metrics.
It's unclear how setting such limits "would damage rather than help" systemic risk regulation.
(And I didn't hear Vartanian complain when FSOC cited these metrics in AIG's de-desig.)
It's unclear how setting such limits "would damage rather than help" systemic risk regulation.
(And I didn't hear Vartanian complain when FSOC cited these metrics in AIG's de-desig.)
Vartanian glosses over some of the most important parts of the bill, dismissing them as old hat.
To be clear, the bill would raise capital expectations by ~50%, require product-by-product antitrust analysis, and mandate disclosure of managerial evaluations.
All big innovations.
To be clear, the bill would raise capital expectations by ~50%, require product-by-product antitrust analysis, and mandate disclosure of managerial evaluations.
All big innovations.
Vartanian's main argument seems tone that we shouldn't change anything about bank merger oversight unless/until the Community Reinvestment Act is reformed.
This is a delay tactic.
This is a delay tactic.
Regulators expect very little of merging banks under the CRA - a Satisfactory rating is enough. So banks aim for mediocrity.
Regulators should expect merging banks to have Outstanding records of low- and moderate-income lending - whether or not the CRA is reformed.
Regulators should expect merging banks to have Outstanding records of low- and moderate-income lending - whether or not the CRA is reformed.
Vartanian thinks that would be unfair to banks seeking to merge.
But you know what I think is unfair? When banks ignore their responsibilities to low- and moderate-income communities.
But you know what I think is unfair? When banks ignore their responsibilities to low- and moderate-income communities.
In sum, Vartanian favors the status quo: lenient bank merger oversight, excessive consolidation, and consumer neglect.
That approach hasn't worked for sixty years. The Bank Merger Review Modernization Act would fix it.
For more, here's my article: papers.ssrn.com/sol3/papers.cf…
That approach hasn't worked for sixty years. The Bank Merger Review Modernization Act would fix it.
For more, here's my article: papers.ssrn.com/sol3/papers.cf…
