USB/MUFG Orders Point to New Merger, Regulatory Policy
As promised, this analysis focuses on the OCC and FRB approvals of the acquisition by U.S. Bancorp of MUFG’s Union Bank in California. Derided in a tweet from Sen. Warren (D-MA) as another “rubber-stamp” approval, both the nature of the transaction – which included massive commitments to community support – and the approvals themselves suggest otherwise. We shall continue to evaluate agency action on larger transactions and shortly provide clients with an analysis of the FDIC/FRB advance notice of proposed rulemaking on new resolution standards approved for public comment by the FDIC (see Client Report DEPOSITINSURANCE115). However, while policy and politics formulate new standards, pending transactions are directly and immediately affected by the new approach epitomized in these orders. We thus note the financial-stability and resolvability conditions applied to this transaction, which clearly signal those – i.e., “severability” – for near-term deals as well as for future standards.