by Matthew Russell Lee, Patreon Book Substack
FEDERAL COURT, April 27 - How automatic do bank now think merger approvals are? How automatic does the (new) Federal Reserve Board make them? On December 29, 2025, OceanFirst, which settled charges of redlining earlier this decade, announced it will apply to buy Flushing Bank in New York.
Fair Finance Watch opposed it, in comments filed January 2 with the Federal Reserve Board which had recently allowed a $7 billion mega-merger to proceed with no Fed review.
After the Fed withheld all information about Warburg Pincus' other bank holdings, and Inner City Press appealed under FOIA, the Fed hauled off and approved the deal. OceanFirst bragged.
Fair Finance Watch on April 27 filed a formal request for reconsideration under the Fed's rules, including:
Dear Chairman Powell, Secretary Misback: Fair Finance Watch hereby timely requests reconsideration of the Board's approval of the above-captioned proposal, despite OceanFirst's demonstrably disparate lending history and specifically as to the Board's treatment of the investments by funds controlled by Warburg Pincus LLC ("Warburg") in OceanFirst Financial Corp. as part of the transaction. On that:
...FFW did not make a speculative or unsupported factual claim. FFW identified a legal question — whether Warburg's fund investments in OceanFirst, combined with Warburg's existing investments in other banking organizations, triggered filing requirements under Section 3 of the Bank Holding Company Act. That is a legal argument requiring Board analysis. The Board's refusal to engage with it on substantive grounds is itself a legal error. SR Letter 97-10 was designed to filter out anecdotal consumer complaints and unsupported character attacks on applicants. It was not designed to — and cannot lawfully — exempt the Board from analyzing whether a proposed transaction triggers independent statutory obligations under the BHC Act. The two are categorically different. It is an antitrust issue, and the Board's dismissive approach is telling - as is, while the Fed withheld information about the Warburg investments in banks from Inner City Press' FOIA requests and appeal, the Fed calling ICP/FFW's comment "not substantive." It is a Catch-22, intentionally created, insulating the Fed from public scrutiny.
Warburg Pincus is one of the largest private equity firms in the world with an extensive portfolio of financial services investments. Where a private equity firm acquires a controlling or significant interest in multiple banking organizations simultaneously or in close succession, the Board has an independent obligation to assess whether the acquiring entity has become a bank holding company requiring registration and ongoing supervision. The Supreme Court recognized the competitive significance of cross-institutional equity holdings in United States v. Philadelphia National Bank, 374 U.S. 321 (1963), establishing that bank merger analysis must account for the full competitive structure created by a transaction — not merely the nominal parties. While Philadelphia National Bank addressed direct mergers, its logic applies with equal force to situations where a single investor acquires significant interests across competing institutions.
FFW respectfully requests that the Board: Reconsider the approval order and provide a reasoned explanation of its analysis of Warburg's aggregate holdings in banking organizations under Section 3 of the BHC Act and Regulation Y; Require Warburg to submit information regarding its total equity holdings in banking organizations and bank holding companies, and assess whether any such holdings independently trigger BHC Act registration requirements; If the Board concludes no independent filing obligation arose, explain that conclusion with specificity — identifying the threshold analysis applied and Warburg's holdings relative to those thresholds; and Reopen the comment period on the Warburg issue to permit substantive public comment on the information disclosed.
Please have this considered by each Governor, and rule, as much before the possible closing date as possible.
But that's not how today's Fed rolls. The General Counsel alone denied the request(s) on May 5, stating "You further request that the Board (i) articulate why the aggregate interests of Warburg Pincus LLC (“Warburg”), New York, New York, in bank holding companies do not give rise to a section 3 or Change in Bank Control Act filing obligation, (ii) require Warburg to submit additional information, and (iii) reopen the comment period on the Application. The Board’s regulations do not provide for a commenter to request any such actions, particularly in the absence of a filing." That is, if a company decides not to file a change in bank control, then no questioning of it. This is not regulation or supervision - it is capitulation.
In 2024 OceanFirst made 1399 loans to whites - and only 94 to African Americans. In Connecticut, for example, it made loans only to whites, none to African Americans.
In Pennsylvania its ratio of loans to whites to loans to African Americans was 4.5 to 1. In New York, it was 7 to 1.
This proposal is being opposed along with the OCC's moves to exclude the public, and to withhold documents under FOIA from Inner City Press and others until comment periods close.
On February 17 the Fed asked OceanFirst 17 questions, including "Discuss in greater detail the due diligence conducted by OceanFirst related to Flushing Bank’s Community Reinvestment Act (“CRA”) program and how OceanFirst will ensure compliance with Community Reinvestment Act requirements post-acquisition.Todd Schell of Warburg Pincus (“WP”) needs to submit an IBFR for purposes of processing the instant application" - filing on Patreon here
On March 5, the FRB of Philly, not the bank, sent out OceanFirst's response - and it was heavily redacted, including response on CRA. So, an immediate FOIA request, for response / responsive documents within the comment period. Watch this site.
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