Regulators approve U.S. Bank’s $8B purchase of Union Bank

Oct 13, 2022, 10:58 PM | Updated: Oct 14, 2022, 11:36 am
This Wednesday, May 3, 2017, photo shows a U.S. Bank branch in Omaha, Neb. Key financial regulators...

This Wednesday, May 3, 2017, photo shows a U.S. Bank branch in Omaha, Neb. Key financial regulators having approved U.S. Bank’s $8 billion acquisition of Japanese financial titan MUFG’s Union Bank franchise, Friday, Oct. 14, 2022. The moves clear big regulatory hurdles for a deal that will push U.S. Bank closer to the size of Wall Street’s mega banks. (AP Photo/Nati Harnik)

(AP Photo/Nati Harnik)

NEW YORK (AP) — Key financial regulators on Friday approved U.S. Bank’s $8 billion acquisition of Japanese financial titan MUFG’s Union Bank franchise, clearing big regulatory hurdles for a deal that will push U.S. Bank closer to the size of Wall Street’s mega banks.

But in reaching those approvals, both the Office of the Comptroller of the Currency and the Federal Reserve expressed concern about the recent growth of so called “super regional” banks like U.S. Bank, Truist and PNC Financial.

The OCC stipulated in its approval that U.S. Bank must find ways to quickly and easily sell off parts its business in cases of severe economic distress.

“In reaching this decision, the OCC carefully considered the effect of the U.S. Bank and MUFG Union Bank merger on communities, the banking industry, and the U.S. financial system,” said Acting Comptroller of the Currency Michael J. Hsu. “The OCC also took into account … how best to ensure that large banks do not become the next class of too big to fail institutions.”

Meanwhile, Fed Governors said the central bank should consider new regulations for these super-regional banks that would recognize their recent growth in size and what risks they may now pose to the overall financial system.

The nation’s biggest Wall Street banks, technically known as globally systemically important banks, became some of the most strictly regulated institutions following the 2008 financial crisis. They are required to have so-called “living wills” to show how they would best unwind their businesses in case of bankruptcy.

While the Fed may not want to go as far as it did in putting guardrails on the mega banks like JPMorgan, it signaled that the super-regional banks are a growing concern.

“Since we know from experience that even noncomplex banks in that range can pose risks to the broader financial system when they experience financial distress, I am encouraged that the Board is seeking comment on an advance proposal to improve their resolvability,” Federal Reserve Vice Chair Lael Brainard said.

Minneapolis-based U.S. Bank proposed buying the Union Bank franchise from MUFG in September 2021, the latest of several large mergers among similar-sized institutions. The merger wave started with the merger of two Southern banks — SunTrust and BB&T — to create Truist. PNC Financial bought the consumer banking franchise of Spanish bank BBVA last year.

Union Bank has retail branches primarily in West Coast states, with its main banking office in San Francisco. It also has commercial branches in Texas, Illinois, New York, and Georgia.

But unlike the SunTrust-BB&T merger and the PNC-BBVA merger, regulators seemed to take more time on the deal. U.S. Bank and MUFG had to extend their purchase agreement earlier this year to allow the longer regulatory approval.

The Department of Justice gave approval to the U.S. Bank-MUFG deal late last month, requiring U.S. Bank to sell off three bank branches for anti-competitive reasons.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Associated Press

Today in History: December 4, the “Million Dollar Quartet”

Today in History Today is Sunday, Dec. 4, the 338th day of 2022. There are 27 days left in the year. Today’s Highlights in History: On Dec. 4, 1956, Elvis Presley, Johnny Cash, Jerry Lee Lewis and Carl Perkins gathered for the first and only time for a jam session at Sun Records in Memphis. […]
21 hours ago
Associated Press

Saturday’s Scores

BOYS PREP BASKETBALL= Blaine 80, Bear Creek School 38 Jackson 66, Mark Morris 62 Union 70, Lewis and Clark 51 POSTPONEMENTS AND CANCELLATIONS= Olympic vs. Crosspoint Academy, ppd. Sedro-Woolley vs. Meadowdale, ppd. to Dec 3rd. ___ Some high school basketball scores provided by Scorestream.com, https://scorestream.com/ Copyright © The Associated Press. All rights reserved. This material […]
21 hours ago
Associated Press

Saturday’s Scores

GIRLS PREP BASKETBALL= Camas 73, Archbishop Murphy 35 Friday Harbor 31, Bellingham 29 Mead 73, West Linn, Ore. 35 POSTPONEMENTS AND CANCELLATIONS= Crosspoint Academy vs. Olympic, ppd. ___ Some high school basketball scores provided by Scorestream.com, https://scorestream.com/ Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
21 hours ago
Associated Press

Saturday’s Scores

BOYS PREP BASKETBALL= Firth 65, Fruitland 64, OT Highland 58, Salmon River 52 Kimberly 55, Homedale 39 Rigby 62, Mountain View 57 St. Maries 69, Kendrick 48 Timpview, Utah 48, Madison 33 CHARGER TOURNAMENT= Hillcrest 50, Pleasant Grove, Utah 44 ___ Some high school basketball scores provided by Scorestream.com, https://scorestream.com/ Copyright © The Associated Press. […]
21 hours ago
Georgia celebrates a win against LSU in the after the Southeastern Conference championship NCAA col...
Associated Press

SEC halftime contest booed, both students awarded $100,000

ATLANTA (AP) — Just what the Dr ordered. Two college students each wound up winning $100,000 in tuition Saturday, shortly after boos filled Mercedes-Benz Stadium because of a confusing ending in a halftime contest during the SEC championship game. Fans at the LSU-Georgia game jeered when one of the competitors appeared to capture the Dr […]
21 hours ago
Secretary of Defense Lloyd Austin introduces the B-21 Raider stealth at Northrop Grumman Friday, De...
Associated Press

Keep COVID military vaccine mandate, defense chief says

ABOARD A U.S. MILITARY AIRCRAFT (AP) — Defense Secretary Lloyd Austin said he wants to keep the military’s COVID-19 vaccine mandate in place to protect the health of the troops, as Republican governors and lawmakers press to rescind it. This past week more than 20 Republican governors sent a letter to President Joe Biden asking […]
21 hours ago

Sponsored Articles

Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.
SHIBA WA...

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Work at Zum Services...

Seattle Public Schools announces three-year contract with Zum

Seattle Public Schools just announced a three-year contract with a brand-new company to the Pacific Northwest to assist with their student transportation: Zum.
Regulators approve U.S. Bank’s $8B purchase of Union Bank