Congressman to federal agencies: Competitive analysis shows proposal violates antitrust standards
In a letter to the Department of Justice and Federal Trade Commission, Congressman Brian Higgins, D-NY-26, sounded an alarm on the bank merger of First Niagara and KeyCorp.
"With great concern about the local job impact, we took a close look at the deal and believe it to be in violation of federal regulations," Higgins said. "Our findings conclude the deal, as currently proposed, violates federal antitrust law and therefore cannot be allowed to proceed."
On Oct. 29, First Niagara Financial Group and KeyCorp made public their intention to merge. The banks have to make an application to the Federal Trade Commission and the U.S. Department of Justice to make their case the proposed merger will not create uncompetitive banking marketplaces, which would limit customer choice. To determine if a proposed merger is anticompetitive, regulators measure how much more concentrated a banking market will be after the proposed merger.
Using the regulator's own mathematical measure of market concentration, an examination of the data by Higgins confirms the proposed merger fails the market concentration test all across upstate New York, where the two banks each have an extensive branch network, the congressman said.
First Niagara, headquartered in Buffalo's Larkinville neighborhood, has branches throughout New York, Pennsylvania and into New England. It employs 2,230 people in Western New York. KeyCorp. is headquartered in Cleveland and has branches across the Northeast, Midwest and Pacific Northwest. It employs 1,100 people in the Buffalo-Niagara region.
The banks have not indicated how many jobs would be lost, but have indicated they intend to save $700 million per year as a result of the merger. Published reports indicate this merger could cost 1,200 to 1,500 jobs locally.