Dive Brief:

• The Federal Reserve Board and the Office of the Comptroller of the Currency (OCC) will hold public hearings on two large prospective bank mergers, which could portend tougher regulatory scrutiny for future banking tie-ups.
• The regulators called for a virtual hearing on Bank of Montreal’s proposed acquisition of Bank of the West, the U.S. retail arm of French lender BNP Paribas, to be held July 14, according to a press release issued Tuesday.
• The Fed and OCC will hold an additional virtual hearing to discuss TD Bank’s proposed acquisition of First Horizon on Aug. 18, according to another press release issued Tuesday.

Dive Insight:

Acting Comptroller Michael Hsu signaled that the OCC would hold additional public meetings on mergers involving large banks at a Brookings Institution event last week.

The agency is currently working with the Department of Justice (DOJ) and other regulators to review its framework to assess bank mergers. According to Hsu, the agency is considering how to incorporate public input on merger proposals. 

“It is time to rethink how we analyze bank mergers,” Hsu said.

Bank regulators have zeroed in on mergers in recent months. In March, the FDIC submitted a request for information concerning mergers between one or more insured depository institutions.

Tuesday’s announcements come three months after the Fed and OCC scheduled a hearing on the proposed $8 billion merger between U.S. Bank and MUFG Union Bank, first announced in September. 

During the March hearing, U.S. Bank CEO Andy Cecere unveiled a $100 billion community benefits plan in an effort to placate community groups opposed to the deal. 

That meeting marked the first gathering of bank regulators to discuss a merger since the tie-up between BB&T and SunTrust proposed in 2019, and appears to have kicked off a new trend.

Now, the Fed and OCC have called for public meetings to discuss two more large bank tie-ups pending regulatory approval.

Montreal-based BMO announced it agreed to buy San Francisco-based Bank of the West for $16.3 billion back in December, and expected the deal to close by the end of 2022.

And in February, TD Bank — another large Canadian lender — announced plans to purchase Memphis, Tennessee-based First Horizon Bank in a deal valued at $13.4 billion, which may be terminated if it does not close by Feb. 27, 2023.

The OCC will continue to review merger applications on a case-by-case basis, Hsu said at the Brookings Institution event last week.

“[R]ather than being pro-merger or anti-merger, we need frameworks that are smart on mergers," he said.