ABA Letter to DOJ re: Bank Merger Guidelines

United States Department of Justice
Antitrust Division
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001

Ladies and Gentlemen:

The American Bankers Association (ABA) appreciates this opportunity to provide the views ofour members to the Department of Justice Antitrust Division (Division) during its review of the1995 bank mergers guidelines (Banking Guidelines). ABA’s members comprise the entire rangeof the US banking industry and compete vigorously in diverse product and geographic markets toserve their customers. Preserving this diversity and enhancing delivery of financial services tothe national economy is a central concern of both our industry and our nation’s public policy.ABA thanks the Division for undertaking a review of the Banking Guidelines, whose currentform is now 25 years old. In the intervening years, the market for financial products and serviceshas undergone tremendous change, thanks to the rise of online banking, the interstate expansionof bank branch networks since passage of the Riegle-Neal Interstate Banking and BranchingEfficiency Act of 1994,3 and the expanded penetration of markets made possible bycommunication and advertising innovations generally.

As a result of these significant changes in the financial services market, ABA agrees that a wide rangingreview of the Banking Guidelines is urgently needed. Most important, the currentBanking Guidelines fail to account for significant competition in many product lines, especiallyin many rural markets, due to the current definitions of geographic markets. The Division shouldreexamine its current geographic market definitions in light of the financial industry changesnoted above and their impact on the breadth of services available in markets that are currentlytoo narrowly defined. The remainder of this letter elaborates on this recommendation viaanswers to key questions the Division raises in its Request.

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