Economic Liberties, Equitable Growth & Open Markets Urge DOJ to Reverse Consolidation in the Banking Industry
Washington, D.C. — As the Department of Justice reviews its Bank Merger Competitive Review guidelines, the American Economic Liberties Project, Open Markets Institute and Washington Center for Equitable Growth today submitted comments to Assistant Attorney General Delrahim opposing many aspects of DOJ’s proposal and urging DOJ to take meaningful steps to reverse consolidation in the banking industry, and finance more broadly, so as to promote equity, efficiency, stability, and justice in our financial system.
“Our banking system has many problems, but big bank tie-ups being too hard is not one of them,” said Graham Steele, Senior Fellow at the American Economic Liberties Project. “The Justice Department should be doing more to prevent the growing trend of banking megamergers instead of proceeding with this proposal that would weaken its bank merger guidelines and encourage further consolidation that harms communities, small banks and credit unions, and the public.”
Increased concentration in the banking sector threatens financial stability, consumer and small business access to credit, and undermines corporate accountability. Many of these costs are disproportionately borne by low- and moderate-income communities and communities of color, while the benefits flow to bank executives, creditors, and shareholders.
Instead of addressing these issues, the DOJ’s proposal would exacerbate the damage caused by deregulation and lax merger enforcement over the past four decades. In their comments, the American Economic Liberties Project, Open Markets Institute and Washington Center for Equitable Growth urged DOJ to adopt a different course. The groups recommended DOJ focus its energies on the following policies:
- Implementing more stringent enforcement of chartering and restrictions on banking activities;
- Revisiting bank ownership limitations;
- Imposing more stringent limits on concentration, tying, and management interlocks; and
- Reconsidering the role of settlements in penalizing and deterring illegal and improper conduct within large banking conglomerates.
Read the full comment letter here.
Learn more about Economic Liberties here.
Economic Liberties works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. AELP believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.