Rep. Robin Hayes sent a letter Friday to the agency that insures consumers' bank deposits asking why it appeared to be taking sides against a merger between Wachovia and Wells Fargo.
The Concord Republican said he could understand opposition from Citigroup, which had expected to acquire Wachovia in a deal arranged with assistance from the Federal Deposit Insurance Corp., because “they got a great deal and they want to keep it.”
“But for the life of me, I cannot understand why the FDIC would stand in the way of Wachovia entering into an agreement that seems better for their employees, shareholders, customers and the community around them,” he said in the letter to FDIC Chairwoman Sheila Bair. “And since FDIC is not part of this merger, it would seem that it's better for the taxpayer as well.”
Hayes said Citigroup's planned purchase of most of Wachovia's operations, announced Monday, sounded like a “forced arrangement with FDIC in the middle.”
Wachovia surprised just about everyone, and New York-based Citigroup in particular, with an announcement Friday that it had agreed to merge with San Francisco-based Wells Fargo.
Several interested members of Congress said they were monitoring the situation and hoped the banks could resolve their dispute quickly. But allegiances were obvious to their hometowns.
Sen. Dianne Feinstein, D-Calif., whose state is home to Wells Fargo, pointed out that the Citigroup deal relied on FDIC assistance while the other one doesn't.
“I strongly believe that an offer that doesn't use taxpayer money is a better offer,” she said. “To me, this is a no-brainer.”
Sen. Elizabeth Dole, R-N.C., said she hoped a deal could be worked out that “best serves the interests of Wachovia's workforce and the city of Charlotte.”
Hayes' letter was in response to a statement issued by Bair, the FDIC chair. She said she was reviewing “all proposals and working with the primary regulators of all three institutions to pursue a resolution that serves the public interest.”
But she also said: “The FDIC stands behind its previously announced agreement with Citigroup.”
The FDIC said it would respond to Hayes' letter after reviewing it.
Rep. Mel Watt, a Charlotte Democrat who sits on the House Financial Services Committee, said he'd gotten little information about the Wells Fargo development, though his staff was offered briefing materials by Citigroup. Watt said he hoped it would be resolved quickly between the parties and didn't see the need for congressional involvement.
“It's hard for me to evaluate it at this point,” he said. “That's for the shareholders and the management of Wachovia to evaluate.”
Rep. Sue Myrick, a Charlotte Republican, said early Friday that she was pleased to hear about the Wachovia deal with Wells Fargo.
“It's very good for Wachovia and I think it's good for the region,” she said. “I understand it's a much better price. It should help to keep retail banking in Charlotte I think.”