President's Executive Order Calls for Action on Financial Mergers, Ability of Consumers to Switch FIs

WASHINGTON–President Biden’s recent sweeping executive order aimed at increasing competition includes a number of provisions related to financial services.

Among those provisions are orders the Department of Justice and agencies responsible for banking to update guidelines on banking mergers "to provide more robust scrutiny of mergers," and further encourages the Consumer Financial Protection Bureau to issue rules that will allow bank customers to withdraw their data to make it easier to switch banks.”

The details on what precisely both of those directions mean have not yet been provided and will most likely need to be hammered out by the respective agencies involved. Moreover, such Executive Orders often go no further than to “encourage” various institutions to take actions without specifically requiring specific steps.

The Biden Administration has cited concerns over the disappearance of bank branches in many communities that have created so-called “banking deserts.” The lack of branches typically affects rural communities, low-income communities and communities of color, and are often the result of mergers.

Other Provisions

Financial services is by no means the only entities affected by the Executive Order on competition. Among other things it would:

• Make it easier for generic-drug makers and Canadian providers to compete with U.S. pharmaceutical companies
  
  
• Allow Americans to buy hearing aids without a prescription (the New York Times noted a 2017 law — signed by Donald Trump — called for that, but it still has not happened)
  
  
• Require hospitals to be more transparent about billing
  
  
• Force airlines to refund money when they lose bags or when the in-flight Wi-Fi doesn’t function
  
  
• Make sure that farmers can repair their own equipment or choose who repairs it, rather than allowing manufacturers to dictate who can
  
  
• Increase federal scrutiny of tech companies’ mergers and their use of consumer data
  
  
• Restrict non-compete clauses