The approval is conditioned upon U.S. Bank having a plan to sell business lines and portfolios in case of stress, the OCC said in a Friday (Oct. 14) press release.
Following the transaction — which is expected to result in U.S. Bank having $679.6 billion in total assets and $56.1 billion in capital — customers of both banks will have access to a larger and more diverse footprint of banking location, according to the release.
“In reaching this decision, the OCC carefully considered the effect of the U.S. Bank and MUFG Union Bank merger on communities, the banking industry and the U.S. financial system,” Acting Comptroller of the Currency Michael J. Hsu said in the release. “The OCC also took into account the important work initiated by our fellow regulators to evaluate and consider how best to ensure that large banks do not become the next class of too big to fail institutions.”
U.S. Bank parent company U.S. Bancorp’s deal to buy MUFG Union Bank’s core retail banking business was among the pending mergers involving larger regional banks that some had speculated could be slowed down by potential requirements that the banks be required to add to the debt buffer that helps them in times of crisis.
U.S. Bancorp announced in September 2021 that it would acquire MUFG Union Bank’s regional operations in an $8 billion deal.
Read more: US Bancorp to Pay $8B for MUFG Union Bank
As PYMNTS reported at the time, U.S. Bank will gain more than 1 million consumer customers and about 190,000 small business customers in California, Oregon and Washington.
“This increased scale will make the U.S. Bank brand a stronger player in these markets, which will increase competition with California’s three largest banks,” the company said in a Sept. 21, 2021, press release.