Sen. Elizabeth Warren slams Treasury secretary’s openness to bank mergers

Sen. Elizabeth Warren, D-Mass., criticized Treasury Secretary Janet Yellen’s openness to more bank mergers, in a letter she sent on Monday. File Photo by Bonnie Cash/UPI | License Photo

June 28 (UPI) — Massachusetts Sen. Elizabeth Warren, D-Mass., sent a letter to Treasury Secretary Janet Yellen, criticizing her idea that it was OK for banks to get bigger.

In a letter to Yellen and other top bank regulators, Warren warned them not to learn the wrong lessons from recent bank failures. She said that allowing additional bank mergers would harm most Americans.

“Allowing additional bank consolidation would be a dereliction of your responsibilities, hurting American consumers and small businesses, betraying President Biden’s commitment to promoting competition in the economy, and threatening the stability of the financial system and the economy,” she wrote in the letter, according to Politico.

Yellen has said that more mergers could be healthy, and Acting Comptroller of the Currency Michael Hsu recently told Congress that he was committed to being open-minded on the issue.

While bank regulators and the Justice Department have the ability to reject mergers, Yellen still represents a key voice in the Biden administration.

“We certainly don’t want overconcentration and we’re pro-competition, but that doesn’t mean no” mergers, Yellen said in a Wall Street Journal interview published Friday. “We have more banks, relatively speaking, in the United States than almost any country of which I’m aware.”

In her letter, Warren also questioned why banks are no longer being forced by the Department of Justice to divest branches as a condition of merging with other banks.

“Why did DOJ feel the need to relinquish its use of divestitures as a potential remedy?” Warren said.