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Earlier this week, Jonathan Kanter, Assistant Attorney General
for the Antitrust Division of the Department of Justice
(“DOJ”), delivered remarks at the Brookings Institution
titled “Merger Enforcement Sixty Years After Philadelphia
National Bank.” In his remarks, Assistant AG Kanter noted
that the Antitrust Division invited public comment on changes to
the 1995 Bank Merger Guidelines, and that the Division is
considering the comments received during the two rounds of public
comment they requested. He also noted steps the Division is already
undertaking.
Said Assistant AG Kanter: “The division is modernizing its
approach to investigating and reporting on the full range of
competitive factors involved in a bank merger to ensure that we are
taking into account today’s market realities and the many
dimensions of competition in the modern banking sector.” He
went on to note that “[t]hese analyses will include
consideration of concentration levels across a wide range of
appropriate metrics and not just local deposits and branch
overlaps.”
Assistant AG Kanter stated that the division will pay particular
interest to two areas as it prepares its competitive factor
reports: (1) “the division will closely scrutinize mergers
that increase risks associated with coordinated effects and
multi-market contacts,” and (2) “the division will
carefully consider how a proposed merger may affect competition for
different customer segments.” On the first point, smaller
community banks will likely be heartened to hear that Assistant AG
Kanter believes “we will not limit our analysis to small and
local bank acquisitions.”
As we discussed over a year ago, the banking
agencies are also considering updates to their bank merger policies
as part of the whole-government response to the President’s Executive Order in July of 2021. There are
some who may be somewhat disappointed in Assistant AG Kanter’s
remarks, as they seem to indicate an increasing scrutiny of bank
mergers from the DOJ. Some had hoped that a thawing in bank and financial regulators’
views on bank mergers may have recently occurred in the wake of
March and April bank failures. The interaction between and amongst
the DOJ and the banking agencies with regard to bank merger review
will continue to be of great interest.
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