Study of 44 Million Mortgages Finds 5,000 Bank Mergers Did Not Raise U.S. Borrowing Costs
Updated
Updated · ProMarket · Jul 13
Study of 44 Million Mortgages Finds 5,000 Bank Mergers Did Not Raise U.S. Borrowing Costs
1 articles · Updated · ProMarket · Jul 13
Summary
Research tracking 44 million U.S. mortgages from 1994 to 2023 found nearly 5,000 bank mergers did not lift mortgage rates, cut approval rates or worsen delinquency outcomes.
County-level competition explains the result: the average borrower faced more than 130 active lenders, the median lender held just 0.4% share, and typical markets stayed below standard antitrust concentration thresholds.
In counties where large banks bought community banks, active lenders rose from about 150 to 185 within two years and local concentration fell roughly 10% to 15%, suggesting new entry offset merger effects.
The study comes as U.S. bank counts have fallen nearly 70% since 1985—from 14,417 to 4,379—even as the number controlling half of banking assets dropped from 91 to 10.
The authors say the findings challenge merger policy that relies on national bank counts, while noting they cover only deals that already passed regulatory review and do not show whether efficiency gains reached borrowers.