InfoBytes Blog
Chopra releases statement on bank merger policy conflict
On December 14, after his first public meeting as a Member of the Board of Directors of the FDIC, CFPB Director Rohit Chopra issued a statement detailing the circumstances leading up to the request for information (RFI) that seeks public comment on revising the FDIC’s framework for vetting proposed bank mergers. Chopra’s statement follows an FDIC statement (covered by InfoBytes here) refuting a request for review of bank merger policies announced in a CFPB blog post. In his December 14 statement, Chopra challenged the view that only the FDIC Chairperson has the right to raise matters for discussion in board meetings and explained how the Directors had “circulated a draft Request for Information on the Bank Merger Act with the intention of releasing it jointly with the Office of the Comptroller of the Currency.” Chopra noted the draft RFI “was not a draft rule or guidance document – it was largely a series of questions to solicit input, given the President’s reasonable request, the need to incorporate the Dodd-Frank Act’s amendments, and the long-term trend in consolidation.” Chopra further stated that it “should have been a no-brainer where consensus could easily be achieved,” but due to “the General Counsel’s improper assertion that the Chairperson had implicit veto power, the draft was not given appropriate attention.”
Chopra called for “immediate[]” resolution of the conflict, adding that “[a]bsent a return to legal reality and constructive engagement, board members will need to take further steps to exercise independence from management and to ensure sound governance of the [FDIC].”
The same day, acting Comptroller of the Currency Michael J. Hsu released a statement supporting “the view of the majority of the FDIC Board members that the Bank Merger Act (BMA) guidelines are ripe for review,” noting that his particular focus is on “the financial stability prong, given large bank merger trends and my experience in the 2008 financial crisis with too-big-to-fail firms.” Hsu also stated that he “voted for the Request for Information (RFI) on the BMA due to the inability to reach compromise and urgency on the financial stability issue,” and he expressed concerns that “legal or procedural quicksand may ultimately limit our ability to act on this issue in a timely manner.”