The biggest merger in years is reviving the idea that the industry is headed for a barbell-like shakeout, with very large banks on one end, community banks on the other and very few in between.
The Federal Deposit Insurance Corp., BB&T’s primary regulator, has a history of going easy on the bank. The combined entity would be better supervised by the central bank, which already oversees SunTrust.
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“The board's record of summarily approving mergers raises doubts about whether it will serve as a meaningful check on this consolidation that creates a new too big to fail bank,” Sen. Elizabeth Warren said in a letter to the Fed.
SunTrust’s merger with BB&T is the largest bank deal since the financial crisis, and mortgages will play a critical role in the execution of this transaction.
The stars aligned for the two longtime rivals to join forces, and some observers speculate that other regional banks will need to strike similar partnerships if they hope to remain competitive. But others say such deals are rare because they're hard to pull off.
