• The Federal Reserve has likely been in informal consultation with the OCC for perspectives about the Capital One portion of the Synovus-Cabela’s/World’s Foremost Bank (WFB) acquisition. This is not uncommon when one bank regulator may have an interest in a transaction under the jurisdiction of another; this could be viewed as a negative from a timing aspect, even though it might not impact ultimate approval of the acquisition.
• Expert industry practitioners have told Event Driven that the “end around” nature of Capital One’s involvement here, after it was prevented from an outright acquisition of WFB, would “likely” cause the OCC to let the Fed know that the transaction may be “undermining” the OCC’s supervisory authority over Capital One, a concern that the Fed would treat with utmost seriousness.
• Heightened Fed scrutiny might not jeopardize the Fed’s ultimate approval of the transaction but would certainly cause the Fed to take a very deliberate approach, which is at odds with the now-compressed timeframe imposed by the termination date of the Cabela’s/Bass Pro merger.
• Federal banking regulators may also be encouraging Synovus to create a community benefits plan to address concerns raised by civil rights group National Community Reinvestment Coalition; public records indicate that the bank may be reluctant to meet community group concerns which could explain the unexpected delays in approval of the merger.
• Federal bank regulators must approve the merger by Sept. 18 to avoid breaking the Oct. 3 termination date for the Cabela’s/Bass Pro merger, as the transaction will likely be subject to a 15-day Department of Justice waiting period after regulatory approval to consummate the transaction.