Elizabeth Warren grills Fed's Powell over BB&T, SunTrust merger
Sen. Elizabeth Warren grilled Federal Reserve Chairman Jerome Powell during a Capitol Hill testimony on Tuesday, questioning whether the U.S. central bank would provide the necessary scrutiny to a $66 billion merger between BB&T Corp. and SunTrust Banks Inc.
During Powell’s semi-annual testimony on the state of U.S. monetary policy, Warren accused the Fed of rubber-stamping applications for bank mergers and acquisitions. According to the Massachusetts Democrat -- and 2020 presidential candidate -- of the 3,819 applications the central bank has received since 2006, it has denied zero.
That doesn’t necessarily mean the Fed approves all of those applications; roughly 13 percent of requests are withdrawn. In some cases, Powell said, the Fed will discourage applications between companies “where it’s clear there’s a statutory problem.”
But Warren suggested that by quietly meeting with bank officials before publicly approving merger applications, the Fed was robbing the public of a chance to weigh in on potential mergers and acquisitions.
“They have to wait until the Fed has already made a decision,” she said during the somewhat-heated exchange.
And as the Fed prepares to review the proposed BB&T and SunTrust merger -- the deal was announced earlier this month; if approved, it would create the sixth-largest bank in terms of assets and deposits -- Warren probed whether the Fed would truly listen to public comments.
“Is this one just going to be another rubber stamp, you already made the decision behind the closed doors before the public gets a chance to weigh in?” she asked. On Capitol Hill, Warren has gained a reputation for her watchful eye on big business and Wall Street, particularly her tough critiques during congressional hearings.
Powell, however, defended the process and said policymakers at the U.S. central bank would conduct a “very fair and open, transparent process.”
“I think our obligation under the statute are clear and they’re quite broad,” he said. “We’ll be hearing from groups of all kinds and going through our process carefully and thoroughly.”
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In response, Sue Mallino, a spokesperson for SunTrust said there is a "substantial and rigorous" regulatory approval process, which includes the opportunity for stakeholder input and in-depth regulatory analysis.
"We’re confident the BB&T/SunTrust combination of two purpose-driven companies will be positive for consumers and communities," she told FOX Business, adding, "We are working with our regulators throughout the process to discuss the benefits of the merger as well as to address any questions that may be raised."