Biden’s Bank Merger Competition Order: FinTech Disrupts Its Presumptions by Disrupting the Marketplace
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- President Biden’s sweeping Executive Order encouraging competition encourages the DOJ in consultation with the federal banking regulators to review current merger practices for the “revitalization of merger oversight” and toughen the agencies’ scrutiny of future mergers.
- The Executive Order appears to focus on a physical branch-based competition analysis, which is inconsistent with the current realities of the digital banking demanded by consumers and the competitive threat to the banking industry posed by Fintech.
- The restrictive view of competition indicated by the Executive Order further may impede the Biden Administration’s goal of promoting the inclusion of underbanked and unbanked communities. Banks need the economies of scale permitted by mergers to be able to make the investments necessary to create the digital access to reach these communities.