Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our s each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro. Like a puka shell necklace or a Dave Matthews Band mixtape, Assistant Attorney General Jonathan Kanter says the Justice Department’s bank merger playbook is now a relic of the 1990s. “Market realities have shifted. When we apply the law, we have an obligation to the world as it exists today; not as it may have existed on a blackboard in 1995,” Kanter, who oversees the DOJ’s antitrust division, said during an audience Q&A after a speech at the Brookings Institution on Tuesday. According to Kanter, DOJ’s future reviews of bank mergers will look beyond traditional metrics — deposit concentration and the physical location of bank branches — to include factors like fees, interest rates and even customer service, our Josh Sisco and Victoria Guida reported. Depending on the transaction, his department might also weigh how a merger would impact nonbanks and fintechs as well. “All we’re saying is that we're going to look at all the competitive factors,” he said. “We’re not going to artificially limit ourselves to just one or two dimensions of competition.” The question now is what that might mean for the Biden administration’s stance on bank mergers. Kanter’s overall way of dealing with antitrust enforcement has given Wall Street fits, but top banking lobbyists were encouraged in recent weeks by signs that regulators were open to the consolidation of certain midsize lenders after the failures of Silicon Valley Bank, Signature Bank and First Republic sent tremors through the industry this spring. Kanter’s speech — which Americans for Financial Reform Senior Policy Analyst Alexa Philo praised for reasserting DOJ's merger authority in banking — threatens to cool that sentiment. Former acting Comptroller of the Currency Keith Noreika, who now leads U.S. banking efforts at Patomak Global Partners, told MM that Kanter will have to be “very thoughtful” as he incorporates new criteria into his assessment of mergers. Meanwhile, Consumer Bankers Association President and CEO Lindsey Johnson warned that policymakers “should strive to create a regulatory environment where banks are empowered to pursue M&A.” Gregg Rozansky, a senior vice president and senior associate general counsel at the Bank Policy Institute — which represents several of the largest U.S. banks in Washington — was even more pointed. “Today’s speech raises more questions than it answers,” he said in a statement to MM. “While unduly strict and arbitrary standards can harmfully restrict healthy M&A, what is even worse is an opaque, subjective and never-ending process that no bank — acquirer or target — would wish to begin.” Still, Kanter’s efforts, which he framed as a pivot from policies that disproportionately led to enforcement in “transactions involving small local banks” and understated “network concerns relating to large national and multinational banks” — earned plaudits from the Independent Community Bankers of America. “ICBA believes that the Justice Department should look at a wider range of competitive factors when examining a merger and not just focus on local deposits and branch overlaps,” Christopher Cole, ICBA’s executive vice president and senior regulatory counsel, said. “We agree that the Justice Department should consider, for example, whether a merger will have the effect of further consolidating market share among the large banks.” IT’S WEDNESDAY — Send tips, gossip and suggestions to Sam at ssutton@politico.com and Zach at zwarmbrodt@politico.com.
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