June 28 (UPI) — Massachusetts Senator Elizabeth Warren wrote a letter to Treasury Secretary Janet Yellen, criticizing her stance that allowing banks to become larger is acceptable.
In her letter to Yellen and other top bank regulators, Warren cautioned against drawing the wrong conclusions from recent bank failures and highlighted the potential harm of approving additional bank mergers on the majority of Americans.
“Approving more bank consolidation would be neglecting your responsibilities, leading to negative impacts on American consumers and small businesses, contradicting President Biden’s commitment to promoting competition in the economy, and posing a threat to the stability of the financial system and overall economy,” Warren wrote in the letter, as reported by Politico.
Yellen has expressed her belief that more mergers could be beneficial, while Acting Comptroller of the Currency, Michael Hsu, recently conveyed his openness to considering the issue.
Although bank regulators and the Department of Justice possess the authority to reject mergers, Yellen’s viewpoint holds significant weight within the Biden administration.
“While we support competition and oppose excessive concentration, it does not imply a blanket prohibition on mergers,” Yellen stated in an interview with The Wall Street Journal published on Friday. “Compared to most other countries, the United States has a relatively high number of banks.”
Warren’s letter also raised questions about the Department of Justice’s decision to no longer require banks to divest branches when merging with other banks.
“Why did the Department of Justice abandon the use of divestitures as a potential solution?” Warren inquired.
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