US: NY’s Gov urges US to block KeyCorp-First Niagara merger

New York Governor Andrew Cuomo on Wednesday urged federal regulators to block KeyCorp’s plan to acquire First Niagara Financial Group, saying the merger would impede retail banking competition and cost thousands of jobs upstate.

The request, unusual for a sitting governor, came 3-1/2 months after Cleveland-based KeyCorp announced plans to buy Buffalo-based First Niagara for about $4.1 billion of cash and stock, in one of the largest U.S. bank mergers of recent years.

KeyCorp at the time said the combination would create the nation’s 13th-largest commercial bank, with about $135 billion of assets, $99.8 billion of deposits and 1,366 branches in 15 US. states.

In a letter to the Federal Reserve, the Department of Justice and the Office of the Comptroller of the Currency, Cuomo said the merger should be rejected on antitrust grounds.

He said it would add to the tens of thousands of Buffalo-area residents who have difficulty accessing bank branches, and likely force many people to rely on costly alternatives such as payday lenders and check-cashing providers.

The merger “will, by any objective measure, further limit the ability of Upstate New York consumers to access the financial services and products offered by banks,” Cuomo wrote. “If the acquisition application is not blocked, we will be forced to consider legal redress.”

Full content: Reuters

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