March 02, 2023

Brown Presses OCC to Address Bank Mergers and Branch Closures in Low-Income, Rural, and Minority Communities

WASHINGTON, D.C. — Today, Sen. Sherrod Brown (D-OH), Chair of the Senate Committee on Banking, Housing, and Urban Affairs, sent a letter to Michael Hsu, Acting Comptroller of the Currency, expressing concerns about bank branch closures in low- to moderate-income communities. Brown’s letter follows news reports of bank closures in low-income communities and a report from Federal Reserve officials on the negative impact of banking deserts in rural, low-income, and minority communities.

“I am concerned about bank branch closures in low- to moderate-income (LMI) communities in Ohio and across the country,” wrote Brown. “I hope that your agency will work to prevent branch closures and encourage investment in LMI communities, and develop a new approach to bank merger reviews that supports access to traditional financial services and economic prosperity for all.”

Brown has long fought to make our banking system work for working families. In April, Brown sent a letter to the Office of the Comptroller of the Currency and the Federal Reserve urging them to ensure that bank mergers do not harm communities and small businesses. Brown also held the Committee’s annual oversight hearing with seven of the nation’s biggest banks to hold them accountable and ensure that they do right by their customers.

A copy of the letter is available here and below:

Dear Acting Comptroller Hsu:

I am concerned about bank branch closures in low- to moderate-income (LMI) communities in Ohio and across the country. A bank’s presence in a community provides access to traditional financial services and supports economic development. Yet, we have seen an alarming trend of bank branches closing in already underserved communities.[1]

Banks serve a unique role in the functioning of our financial system and economy. That is why they must serve the needs of all members of their community, and all communities across the country. This obligation is reflected in the requirement to hear from the public when a branch closes in an LMI community. Under 12 U.S.C. § 1831r-1, banks are subject to certain requirements, including providing notice to their banking regulators and customers.[2] If a community member submits a written request to the Office of the Comptroller of the Currency (OCC), the agency may hold a public meeting with community leaders to explore how a branch closure would negatively affect the community.[3]

In these cases, I urge the OCC to hold public meetings in response to community requests to evaluate the closure of a branch.[4] I also expect the OCC and other banking regulators to ensure that banks are meeting all requirements before a branch is permitted to close.

Branch closures are also related to a broader trend of consolidation and concentration in the banking industry. Last year, I sent a letter to you and Federal Reserve Chair Jerome Powell that urged you to review and reconsider your approach to big bank mergers.[5] I hope that we can see real changes to the bank merger process to ensure that all communities have access to banking services. I appreciate the steps you have taken to start the conversation through the recent Bank Merger Symposium, but the OCC and other banking regulators must take concrete actions to revise their bank merger policies.

I hope that your agency will work to prevent branch closures and encourage investment in LMI communities, and develop a new approach to bank merger reviews that supports access to traditional financial services and economic prosperity for all.

Thank you for your prompt attention to this matter.

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