Fed, OCC set public hearing on U.S. Bank-Union Bank deal

Federal regulators have granted a public hearing next month on U.S. Bancorp’s proposed acquisition of MUFG Union Bank, a win for community activists that have pushed for a chance to weigh in on the $8 billion deal.

The hearing will be hosted virtually on March 8, the Federal Reserve and the Office of the Comptroller of the Currency said Monday. Anyone wanting to make a public comment during the meeting must register by March 1.

It will be the first public meeting that regulators have called for a bank merger since 2019, when two meetings were held for the BB&T-SunTrust Banks deal that formed the $541 billion-asset Truist Financial.

The hearing is coming at time when federal banking agencies are being pressed to more heavily scrutinize consolidation within the industry.

Last year, President Biden signed an executive order pushing the Justice Department and federal regulators to review their process for reviewing bank merger and acquisition applications. The White House at the time raised concerns over how these deals have been shown to shrink small-business lending and branch availability and lead to higher borrowing costs for people of color.

House Financial Services Chair Maxine Waters, D-Calif., urged federal banking regulators in a Sept. 29 hearing to grant more public hearings on M&A deals and allow advocates to raise concerns publicly with banking executives.

Meanwhile, Martin Gruenberg, who took over as acting chair of the Federal Deposit Insurance Corp. on Monday after Jelena McWilliams resigned, said he intends to pursue changes to the agency’s policies for reviewing bank mergers.

“In light of the significant implications of bank mergers for competition, safety and soundness, financial stability, and meeting the financial services needs of communities, a careful interagency review of the bank merger process is warranted,” the FDIC said in a statement.

Community groups in California have raised concerns about the lending practices of the $573 billion-asset U.S. Bank and what effect losing San Francisco-based Union Bank to the larger company might mean for many neighborhoods. In a letter sent to regulators last year asking for a public hearing on the merger, the California Reinvestment Coalition said U.S. Bank’s mortgage lending in lower-income areas and to borrowers of color lagged its peers.

U.S. Bank has claimed that expanding its presence in California with the acquisition of the $133 billion-asset Union Bank would benefit customers because the added scale would help it better compete with the likes of Wells Fargo and JPMorgan Chase.

U.S. Bank executives said in January that they still expect the deal will close in the first half of this year.

A U.S. Bank spokesperson said in a statement Monday that “listening to community leaders and stakeholders has always been a priority.”

“We welcome the continued opportunity to hear from stakeholders and members of the communities that we serve on how we can ensure that this combination provides customers with the banking services they need and fosters competition,” the spokesperson said.

The bank has been meeting with community groups like the National Community Reinvestment Coalition during the process.

“It is good for regulators to scrutinize bank mergers to ensure they will benefit the communities affected by such deals,” NCRC Chief Executive Jess Van Tol said in an email Monday. “We are glad that this public hearing will give those communities a chance to share their thoughts on the proposed deal.”