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Volume XI, Number 211

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President Biden Signs Executive Order Revitalizing Regulatory Oversight of Banks and Encouraging New Consumer-Friendly Portability Rules

On July 9, 2021, President Biden signed the wide-ranging Executive Order on Promoting Competition in the American Economy, aimed at increasing competition in all sectors of the American economy, including banking and consumer finance. The Biden administration also released a Fact Sheet in support of the Executive Order. The administration noted in the Fact Sheet that “excessive consolidation” has led to increased costs for Americans, including small business owners and low-income communities in relation to banking services. According to the Fact Sheet, in recent decades the U.S. has lost “70% of the banks it once had, with around 10,000 bank closures”. The administration notes that communities of color have been disproportionately affected by these changes, as 25% of bank closures in rural areas have been in majority-minority communities.

In issuing the Executive Order, Biden signaled to regulatory agencies that oversee the banking industry, including the Department of Justice, Federal Deposit Insurance Corporation and Office of Comptroller of the Currency, that they should revitalize their oversight of bank mergers in an effort to promote fair competition and remain consistent with traditional antitrust laws. The Biden administration hopes that such revitalization of oversight will offer Americans more choice in selecting financial institutions and prevent “excessive market power” within the banking community. 

Additionally, the Executive Order called upon the Consumer Finance Protection Bureau to exercise its rulemaking capabilities to increase portability of consumer financial data in accordance with Section 1033 of the Dodd-Frank Act. The administration implied that such portability will also encourage competition because consumers will be able to more easily transfer their financial data to other financial institutions.

The Executive Order has resulted in mixed reactions within the banking community, with some doubting whether the Executive Order will have any enforceable effect on the industry. We expect the impacts of the Executive Order to manifest over the next few months and will keep the banking community up to date with any new developments or insights.

Copyright © 2021 Womble Bond Dickinson (US) LLP All Rights Reserved.National Law Review, Volume XI, Number 197
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About this Author

B. Taber Cathcart PARTNER Financial Institutions
Partner

Taber Cathcart is co-leader of the Firm’s Financial Services Sector Team and a Partner in the Firm’s Capital Markets Group. She focuses her practice on diversified financial transactions, primarily concentrating on senior and subordinated debt transactions, including acquisition finance, real estate and working capital credit facilities.

Taber has a broad range of experience representing financial institutions, investment firms and institutional investors in a variety of roles, including as agent banks, arrangers, underwriters and lead senior and or mezzanine debt providers, whether...

704-350-6346
Erik J. Chamberlin Corporate and Finance Attorney Womble Bond Dickinson Charlotte, NC
Associate

*Erik is not licensed to practice law in North Carolina.  His activities are supervised by a lawyer licensed to practice in North Carolina. 

Erik Chamberlin is an attorney in our capital markets group with several years of experience working on corporate and finance-related matters.  Erik has a wide range of experience representing lenders, borrowers, issuers, and underwriters in a variety of financing structures. He represents clients through all stages of a transaction, including drafting and negotiating transaction documents and guiding them through the closing process...

704.331.4942
Amy Jicha Womble Bond Dickinson Charlotte Associate Attorney Womble Bond Dickinson
Associate

Amy is an associate in the Capital Markets group and focuses her practice on financial transactions, including bilateral and syndicated commercial and corporate credit facilities as counsel for agents, arrangers, lenders and borrowers. 

704-350-6316
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