Regulators and politicians are scrutinising Canadian banks more closely as they attempt to grow through acquisitions in the United States, and there is renewed focus on previous disagreements.
Both TD Bank and BMO are seeking to close significant purchases there; TD has a US$13.4 billion deal for First Horizon, which focuses on the Southeast United States, while BMO has a US$16.3 billion deal for Bank of the West, which is centred in California.
After U.S. President Joe Biden issued a sweeping executive order last year asking for stronger economic competitiveness, including through the “revitalization” of merger oversight in the banking industry, the Canadian banking sector has made a general push south for expansion.
Although public hearings are not required by regulators, the U.S. Office of the Comptroller of the Currency declared in May that they would be applicable to BMO and TD Bank’s proposed mergers. The time for public comment on both accords was also extended.
Following a speech by acting OCC chief Michael Hsu, he stated: “the time is ripe to rethink the frameworks used to analyze bank merger applications.”
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