The Bank Merger Act: Background of the 1966 Version

Abstract

* The author is Economic Advisor, Second National Bank Region. The views expressed are his own, and are not to be construed as representing the official position of the Office of the Comptroller of the Currency. 'Robertson bill: Amend the Bank Merger Act of 1960, Hearings before Subcommittee of the Committee on Banking and Currency U.S. Senate S. 1698, 89th Cong. 1st Sess. (1965), pp. 6-7. Hereafter cited as Sen. Hearings. The A.B.A. resolution in favor of this bill in To Amend the Bank Merger Act of 1960, Hearings before the Subcommittee on Domestic Finance of the Committee on Banking and Currency House of Representatives on S. 1698, 89th Cong. 1st Sess. (1965), III, 1433. Hereafter cited as House Hearings. explicit and primary criterion in the consideration of bank mergers, though not the sole criterion. 2 On the other side, the I.B.A. criticized the administration of the 1960 law for failg t inhibit bank mergers.3 The federal ba king agencies had approved over 90% of the applications, several members of the House Banking Committee pointed out.4 Such liberality had not been the intent of Congress in 1960, in the view of Representatives Reuss and Minish. Chairman Patman of the House Banking Committee told the House that the 1960 law expressed a clear and unequivocal statement of congressional intent...to stop the bank merger movement and to eliminate increasing concentration in the banking industry. The Federal banking agencies have failed to carry out this mandate. 5 The effect of the 1960 law, according to the I.B.A., had actually been to speed the merger rate. Statistics were cited that from 1957 through 1959, 472 banks with $7.8 billion in assets merged, whereas in the three years from 1961 through 1963, 477 banks with $11.7 billion were involved.6 A five year perspective, however, would change the picture: from 1955 through 1959, 883 banks with resources of $16.6 billion were