Members of the Federal Reserve and FDIC listen to comments on the planned merger of BB&T and SunTrust Banks at the Charlotte branch of the Federal Reserve Bank of Richmond. By David T. Foster III
Branch closures. Cuts in lending to minorities and low-income communities. Fewer loans to small businesses.
Those were among the concerns expressed about the proposed merger of BB&T and SunTrust during a public hearing Thursday on the $66 billion deal. The hearing by the Federal Reserve and Federal Deposit Insurance Corporation was part of the regulators’ review of the deal, which would result in the sixth-largest bank in the U.S. That bank would be headquartered in Charlotte.
It was the first meeting held for the public to address the proposed largest bank merger since the financial crisis of 2008.
More than 100 people attended the meeting at the Charlotte branch of the Federal Reserve Bank of Richmond in uptown. It drew a range of opponents and supporters, including SunTrust CEO Bill Rogers and BB&T CEO Kelly King.
But critics at the meeting said the combination of two already-large banks will result in less competition, potentially resulting in high banking costs for customers of the new bank. They also said the deal has the potential to harm communities, particularly from the closure of branches in rural areas when the industry has already shuttered branches in such places. Branch closures
BB&T and SunTrust have said they could cut costs by trimming branches, noting that approximately 740 of their branches are within 2 miles of each other. In the Charlotte metro area, the banks have about 100 branches combined, according to federal data.
Branch closures in rural areas would hurt black farmers, Lesley Weaver, attorney for the National Black Farmers Association, a Virginia-based nonprofit, said at the meeting.
The merger would also concentrate more market share in the hands of the new bank, potentially raising costs for customers, she said. In certain metro areas, the merged bank will have more than 20 percent market share, she said.
“Increased market concentration leads to worse economic terms for bank customers,” Weaver said. The combination is also creating concerns that it is part of an industry trend that would make lending less accessible to black farmers, she said. She urged the Fed and FDIC not to approve the combination.
Jen Giovannitti, president of Pittsburgh-based Claude Worthington Benedum Foundation, also expressed fears about branches closing.