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The Department of Justice’s Antitrust Division announced today that it is seeking public comments into whether the division should revise the 1995 Bank Merger Competitive Review guidelines (“Banking Guidelines”) to reflect emerging trends in the banking and financial services sector and modernize its approach to bank merger review under the antitrust laws. Today’s announcement is part-and-parcel of the division’s broader efforts and increased focus on protecting competition in the financial markets and follows the recent remarks and announcement by Assistant Attorney General for the Antitrust Division Makan Delrahim, concerning the realignment of commodities at the division.
“Innovative emerging technologies are disrupting traditional banking models and introducing new competitive elements to the financial sector,” said Assistant Attorney General Makan Delrahim. “As part of the division’s increased attention to modernizing our competitive analysis of financial services markets, we are examining whether the 1995 Banking Guidelines need updating to reflect our evolving economy.”
The federal antitrust laws generally apply to financial institutions in the same way as to other economic sectors. Special procedures, however, apply to the competitive review of bank mergers. The relevant bank regulatory agency must approve any bank merger application following a concurrent competitive review conducted by the division. Historically, the initial review of the large number of bank merger applications received annually by the division is done through a review process based on the Banking Guidelines using market shares, market concentration thresholds, and other market facts and conditions. The purpose of this process is to identify proposed mergers that do not have significantly adverse effects on competition and to allow them to proceed quickly. If a bank merger application raises potential competitive concerns, the division may open an investigation. In investigating the competitive effects of bank transactions, the Division applies the same federal antitrust laws and antitrust analysis that it applies to other industries, including the analytical framework set forth in the Department of Justice’s Horizontal Merger Guidelines. As set forth in the Federal Reserve and the division’s 2014 Frequently Asked Questions, the division’s review of bank mergers is “independent” from review by the Federal Reserve (and other bank regulators) and “a transaction that meets the Federal Reserve’s HHI delegation threshold still may raise concern in the division’s review.”
Although the division and the Federal Trade Commission revised their Horizontal Merger Guidelines in 2010, the Banking Guidelines have remained virtually unchanged since 1995.
As part of its review, the division invites interested persons, including banks, other financial institutions, and industry stakeholders, to provide the division with information or comments relevant to whether the division should revise the Banking Guidelines or change the way it analyzes bank mergers to reflect modern trends in financial services and banking competition. In particular, the division seeks public comments on the issues found in the Antitrust Division Banking Guidelines Review - Public Comments Topics & Issues Guide. The division has and will continue to consult with the Federal Reserve and other banking agencies and will review and consider public comments before deciding on the most appropriate course of action.
Comments on the Banking Guidelines can be emailed to ATR.BankMergers@usdoj.gov and must be received no later than October 16, 2020.*
* The original version of this release stated the public comment period ended on October 1, 2020. The original 30 day comment period is now extended to 45 days.