[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                    THE NEXT MEGABANK? EXAMINING THE
                  PROPOSED MERGER OF SUNTRUST AND BB&T

=======================================================================

                                HEARING

                               BEFORE THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 24, 2019

                               __________

       Printed for the use of the Committee on Financial Services
       
                                  Serial No. 116-41
                                  
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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
40-159 PDF                  WASHINGTON : 2020                     
          
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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 MAXINE WATERS, California, Chairwoman

CAROLYN B. MALONEY, New York         PATRICK McHENRY, North Carolina, 
NYDIA M. VELAZQUEZ, New York             Ranking Member
BRAD SHERMAN, California             PETER T. KING, New York
GREGORY W. MEEKS, New York           FRANK D. LUCAS, Oklahoma
WM. LACY CLAY, Missouri              BILL POSEY, Florida
DAVID SCOTT, Georgia                 BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas                      BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri            SEAN P. DUFFY, Wisconsin
ED PERLMUTTER, Colorado              STEVE STIVERS, Ohio
JIM A. HIMES, Connecticut            ANN WAGNER, Missouri
BILL FOSTER, Illinois                ANDY BARR, Kentucky
JOYCE BEATTY, Ohio                   SCOTT TIPTON, Colorado
DENNY HECK, Washington               ROGER WILLIAMS, Texas
JUAN VARGAS, California              FRENCH HILL, Arkansas
JOSH GOTTHEIMER, New Jersey          TOM EMMER, Minnesota
VICENTE GONZALEZ, Texas              LEE M. ZELDIN, New York
AL LAWSON, Florida                   BARRY LOUDERMILK, Georgia
MICHAEL SAN NICOLAS, Guam            ALEXANDER X. MOONEY, West Virginia
RASHIDA TLAIB, Michigan              WARREN DAVIDSON, Ohio
KATIE PORTER, California             TED BUDD, North Carolina
CINDY AXNE, Iowa                     DAVID KUSTOFF, Tennessee
SEAN CASTEN, Illinois                TREY HOLLINGSWORTH, Indiana
AYANNA PRESSLEY, Massachusetts       ANTHONY GONZALEZ, Ohio
BEN McADAMS, Utah                    JOHN ROSE, Tennessee
ALEXANDRIA OCASIO-CORTEZ, New York   BRYAN STEIL, Wisconsin
JENNIFER WEXTON, Virginia            LANCE GOODEN, Texas
STEPHEN F. LYNCH, Massachusetts      DENVER RIGGLEMAN, Virginia
TULSI GABBARD, Hawaii
ALMA ADAMS, North Carolina
MADELEINE DEAN, Pennsylvania
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
DEAN PHILLIPS, Minnesota

                   Charla Ouertatani, Staff Director
                           
                           
                           C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    July 24, 2019................................................     1
Appendix:
    July 24, 2019................................................    55

                               WITNESSES
                        Wednesday, July 24, 2019

King, Kelly S., Chairman and Chief Executive Officer, BB&T 
  Corporation....................................................     5
Rogers, William H., Jr., Chairman and Chief Executive Officer, 
  SunTrust Banks, Inc............................................     6

                                APPENDIX

Prepared statements:
    King, Kelly S.,..............................................    56
    Rogers, William H., Jr.......................................    63

              Additional Material Submitted for the Record

King, Kelly S.:
    Written responses to questions for the record submitted by 
      Representatives Ocasio-Cortez, Sherman, and Garcia of 
      Illinois...................................................    69
Rogers, William H., Jr.:
    Written responses to questions for the record submitted by 
      Representatives Ocasio-Cortez, Sherman, and Garcia of 
      Illinois...................................................    73

 
                      THE NEXT MEGABANK? EXAMINING
                         THE PROPOSED MERGER OF
                           SUNTRUST AND BB&T

                              ----------                              


                        Wednesday, July 24, 2019

             U.S. House of Representatives,
                   Committee on Financial Services,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 10:10 a.m., in 
room 2128, Rayburn House Office Building, Hon. Maxine Waters 
[chairwoman of the committee] presiding.
    Members present: Representatives Waters, Maloney, 
Velazquez, Meeks, Clay, Scott, Green, Cleaver, Foster, Beatty, 
Vargas, Gottheimer, Lawson, Tlaib, Porter, Axne, Casten, 
Pressley, Ocasio-Cortez, Lynch, Gabbard, Adams, Garcia of 
Illinois, Phillips; McHenry, Wagner, Posey, Luetkemeyer, 
Huizenga, Duffy, Stivers, Barr, Tipton, Williams, Hill, Emmer, 
Zeldin, Loudermilk, Davidson, Budd, Kustoff, Gonzalez of Ohio, 
Rose, Steil, Gooden, and Riggleman.
    Chairwoman Waters. The Committee on Financial Services will 
come to order. Without objection, the Chair is authorized to 
declare a recess of the committee at any time.
    Today's hearing is entitled, ``The Next Megabank? Examining 
the Proposed Merger of SunTrust and BB&T.'' I now recognize 
myself for 4 minutes to give an opening statement.
    Good morning. Today we are here for a hearing on the 
proposed merger between SunTrust and BB&T. Our witnesses today 
are BB&T's Chairman and CEO, Kelly King, and SunTrust's 
Chairman and CEO, William Rogers.
    I am concerned that if this merger goes forward, it will 
create yet another megabank that is too big to manage and that 
poses a risk to our financial system. This is the largest 
proposed merger since the financial crisis, and it would create 
the 6th largest bank in the nation.
    If this merger is approved by regulators, the resulting 
bank would have around $442 billion in assets, making it larger 
than Washington Mutual was and more than twice as large as 
Countrywide was. Of course, the failure of those two 
institutions played a significant role in the financial crisis.
    As the Trump Administration has rolled back rules for our 
biggest banks, I and other Democrats warned that we would see 
larger banks start to merge again, and sure enough, here we 
are. Bank mergers of this scale are a serious matter with 
implications for the broader economy that warrant scrutiny by 
Congress.
    I am concerned that this proposed merger would ultimately 
not be beneficial for the consumers or the communities that 
these two banks currently serve. It remains unclear how many of 
the 57,000 people who work at these two banks would lose their 
jobs as a result of this merger, which the banks say will save 
them $1.6 billion annually.
    It is also unclear how many bank branches may be closed, 
given that the 2 banks have 740 branches that are within 2 
miles of another branch, according to news reports.
    Additionally, this committee needs to better understand 
what the new bank's commitment to diversity will be, especially 
as reflected in its management, board of directors, and 
retention of employees.
    For these reasons, and because regulators typically rubber 
stamp these merger applications with little scrutiny, I asked 
the Federal Reserve and the Federal Deposit Insurance 
Corporation to at least defer any final decisions on the 
application for this merger until after this committee has had 
the opportunity to conduct a full review of the matter.
    As a result, in part, of scrutiny and skepticism from 
Members of Congress, SunTrust and BB&T have taken the step of 
announcing a Community Benefits Agreement with community groups 
in advance of this hearing. The commitments that the bank made 
in the agreement seem to be a positive step, though it is 
nonbinding, and it is unclear if it represents a meaningful 
increase in lending and investments beyond what the banks are 
already doing.
    Ultimately, it is not enough to address the serious 
concerns that I and others have about this proposed merger. 
Many questions remain. So today, Mr. King and Mr. Rogers must 
provide clear answers to the members of the committee and the 
public on these important issues, and I look forward to hearing 
from our witnesses.
    The Chair now recognizes the ranking member of the 
committee, the gentleman from North Carolina, Mr. McHenry, for 
4 minutes for an opening statement.
    Mr. McHenry. Thank you. And I want to thank our witnesses 
for appearing today.
    I have noticed a trend in this committee this year: We seem 
to be on a buyer's remorse tour. First, we had a hearing with 
the seven top CEOs of global systemically important banks that 
focused primarily on their approvals, their overall size, and 
their recent growth. Next, the committee advanced legislation 
that would limit the independence of the Consumer Financial 
Protection Bureau (CFPB).
    And today, we are examining the potential merger of two 
institutions that have pointed to the post-Dodd-Frank 
regulatory landscape and the cost of compliance as one of the 
drivers behind their decision to merge. I can't help but 
believe this is another example of buyer's remorse on the part 
of my Democrat friends.
    It was Dodd-Frank and the resulting 400 new financial 
regulations that have forced consolidation in the financial 
services industry. It is my colleagues on the other side of the 
aisle who have made the largest banks larger, while suffocating 
smaller institutions. Since the financial crisis, the Fed has 
approved 1,812 mergers of banks. This is the first hearing of 
this kind in the last 20 years in this committee.
    Despite the rhetoric, the Democrats have solidified the 
reality that size equals survival. We will undoubtedly hear 
today about shortcomings of the bank merger process. And for 
the record, transparency is a prerequisite for approving a bank 
merger.
    Both the Bank Holding Company Act and the Bank Merger Act 
clearly outline steps that must be taken. The Justice 
Department conducts a thorough review of the impact of 
competition and reports on competitiveness to ensure full 
compliance with antitrust laws. Federal banking regulators also 
conduct studies on competitiveness, looking closely at the 
impact to consumers from an institution's footprint. The merger 
applications submitted are publicly available, as are thousands 
of pages of supplemental information. Public meetings have been 
held, and transcripts of those meetings are available online 
for all to read.
    I remind my colleagues that the last legislative change to 
the bank merger process was actually in Dodd-Frank. Democrats 
had every opportunity to address whatever shortcomings they 
will identify today, but they failed to do so.
    This hearing is being held in the middle of a merger 
process. Business decisions cannot be made at this time, 
because the two institutions remain separate and are compelled 
under law from sharing that information.
    Unfortunately, I expect my friends on the other side of the 
aisle will ask questions that the witnesses are prohibited by 
law from answering.
    What we do know is this: As part of the Community Benefits 
Plan announced July 16th, the new bank has committed to open at 
least 15 new branches in low- and moderate-income and majority/
minority communities across its footprint. That is in addition 
to the staggering $60 billion committed by the institution to 
community reinvestment activities. The regulators are examining 
this and many other possible implications of this merger in 
detail, which this body is not privy to at this point.
    Mergers are grounded in procedure. Concerns are not simply 
swept under the rug. I hope my colleagues understand and 
respect the limitations under which these folks are testifying 
today. I trust the witnesses will be as forthcoming as possible 
with the limitations set out in statute.
    Furthermore, these two institutions are in essence large 
Main Street banks, doing standard non-capital-markets-oriented 
business. This is a standard merger process by which the Fed is 
well-equipped to deal with the law.
    And with that, I yield back.
    Chairwoman Waters. The Chair now recognizes the Chair of 
our Subcommittee on Consumer Protection and Financial 
Institutions, Mr. Meeks, for 1 minute.
    Mr. Meeks. Thank you, Chairwoman Waters.
    Financial technology is both the problem we are trying to 
solve and the solution we are turning to. This merger of is a 
good example of that and an important reminder that we must 
consider the broader market implications of a rapidly changing 
banking landscape enabled in large part by innovations in 
technology. Indeed, without developments in technology, it 
would not be possible to manage megabanks, to have global 
banks, or to engage in branchless banking.
    BB&T and SunTrust have argued that the scale and scope of 
technology investments is an important factor spurring their 
merger. That raises great concerns for me about the future of 
community banking, of small banks, and of minority banks.
    What we are told is that fintech solutions would add access 
and bring financial services to all corners of the market. But 
what we are seeing thus far is market consolidation, the 
disappearance of small community banks and minority banks, the 
rapid growth of banking deserts, and a growing number of 
Americans who are unbanked and underbanked.
    I yield back the balance of my time.
    Chairwoman Waters. The Chair now recognizes the ranking 
member of the subcommittee, Mr. Luetkemeyer, for 1 minute.
    Mr. Luetkemeyer. Thank you, Madam Chairwoman.
    From Main Street to Wall Street, the success of our economy 
is driven by economic freedom. The foundation of the American 
Dream is the idea that a free market economy will allow 
entrepreneurs, business, and workers to succeed.
    Over the last decade, increased regulation of the financial 
services industry has cultivated an environment where the 
survival of a financial institution is intrinsically tied to 
its size. Banks across the nation have struggled under the 
weight of overregulation, causing a major consolidation in the 
industry.
    Today, we are hearing from two private companies who have 
announced their intention to merge through the prescribed legal 
and regulatory process, which was most recently amended by the 
2010 Dodd-Frank Act.
    We have an important role in overseeing the Federal banking 
agencies' evaluation of the proposed merger. However, size is 
neither a legally disqualifying characteristic for bank mergers 
nor a reason to villainize two companies following the merger 
process.
    It is the job of this committee to ensure the proposed 
merger is thoughtfully and thoroughly reviewed in accordance 
with current law. I would caution my colleagues against judging 
these two institutions based on any factors outside the legal 
process and, instead, ensure these institutions comply with all 
legal requirements set forth by Congress and the regulators 
examining this merger.
    With that, I yield back, Madam Chairwoman.
    Chairwoman Waters. And now, I want to welcome today's 
panel.
    First, Mr. Kelly S. King, chairman and chief executive 
officer of BB&T Corporation. He has been with BB&T for 46 years 
and has served in senior leadership positions since 1996.
    Mr. King is currently expected to serve as chief executive 
officer and chairman of the board of directors of the newly 
merged bank until September 2021 and to serve in various 
capacities thereafter.
    And second, Mr. William H. Rogers, Jr., chairman and chief 
executive officer of SunTrust Banks, Inc. Mr. Rogers has been 
at SunTrust for 39 years, serving in senior positions since 
2008, when he was named president.
    Mr. Rogers is expected to serve as president and chief 
operating officer of the new bank and to succeed Mr. King as 
chief executive officer and chairman of the board.
    Without objection, your written statements will be made a 
part of the record. And each of you will have 5 minutes to 
summarize your testimony. When you have 1 minute remaining, a 
yellow light will appear. At that time, I will ask you to wrap 
up your testimony so we can be respectful of the committee 
members' time.
    Mr. King, you are now recognized for 5 minutes to present 
your oral testimony.

   STATEMENT OF KELLY S. KING, CHAIRMAN AND CHIEF EXECUTIVE 
                   OFFICER, BB&T CORPORATION

    Mr. King. Chairwoman Waters, Ranking Member McHenry, and 
distinguished members of this committee, thank you for this 
opportunity to discuss our merger. We really appreciate it.
    I have been with BB&T for 47 years. I have been very proud 
to be the CEO for the last 10 years.
    Our mission is very clear: We want to make the world a 
better place to live. We do that by helping our clients achieve 
economic success and financial security. We try to create a 
place where our associates can learn and grow and be fulfilled 
in their work, and we focus on making our communities better 
places to live.
    We know that SunTrust shares these values as well. So 
coming together, two great companies can make the world a 
better place.
    Our success and our communities' success are exactly the 
same. That is why in 2009, BB&T created what we call the BB&T 
Lighthouse Project. During this project, our associates go out 
with financial support from the bank and try to do community 
projects to help the local communities. Since 2009, we have 
done over 12,000 projects, we have touched over 18 million 
people, and we really have improved the community.
    We are very proud of our recent Community Benefits Plan. In 
this plan, we will invest $60 billion in loans and investments 
to low- and moderate-income borrowers in communities over a 3-
year period of time. This will include $31 billion in mortgage 
loans to LMI borrowers, $7.8 billion in small business loans, 
and $17.2 billion in community development lending to support 
affordable housing development.
    I understand how important housing is. I was born in public 
housing. When I was 13-years- old, I still lived in a plank 
house on a small country farm with no insulation and no running 
water. I know the impact of living in insecure housing.
    Our new company will remain committed to underserved 
neighborhoods. We are committed to opening at least 15 branches 
in LMI and majority/minority communities, and we are committed 
to increasing diversity and inclusion. It is the right thing to 
do, and it makes good business sense. It helps us understand 
our markets, makes our associates more effective, and it 
improves our overall results.
    We understand that there is much work to be done in our 
country concerning equal opportunity. We will maintain our 
commitment to serving all communities equally and fairly.
    We were very excited to join Congresswoman Alma Adams, 
Representative of the 12th District of North Carolina, and a 
distinguished member of this very committee, in her partnership 
challenge to establish strategic partnerships with Historically 
Black Colleges and Universities (HBCUs) across this country. We 
are also very happy to announce that we are planning next year 
to host a leadership forum for HBCU chancellors around this 
country to help them become better leaders.
    The world is changing very, very fast. Scale is becoming 
very important. When I first started in banking, the only thing 
that really mattered in terms of the client was the touch 
between the banker and the client.
    A few years ago, that really started changing dramatically. 
Today, technology is much more important. In order to have 
really good quality today, you have to have a blended 
relationship between touch, which is still important, and 
technology. With this combination we will be able to make the 
investments and have the skill and the capability to be able to 
offer a really high level of trust based on technology and 
touch.
    We are very passionate about our communities. It is who we 
are. In fact, it is one of the cornerstones of this merger.
    We get up every morning as bankers thinking about how we 
can help our clients achieve their dreams and goals and hopes 
in life. But to serve our clients and communities, we need the 
scale and capacity to make investments in better technology 
with better products and better services. We simply want to 
exceed our clients' expectations, we want to invest in 
community development, and we want to help create more jobs.
    We can only serve our clients in communities with the best, 
most talented women and men who have made us what we are today. 
We are also committed to helping clients achieve their dreams 
and goals and hopes in life. Working together, all of us, we 
believe we can make the world a better place to live.
    Thank you for this opportunity to discuss our merger, and I 
look forward to answering your questions.
    [The prepared statement of Mr. King can be found on page 56 
of the appendix.]
    Chairwoman Waters. Mr. Rogers, you are now recognized for 5 
minutes to present your oral testimony.

    STATEMENT OF WILLIAM H. ROGERS, JR., CHAIRMAN AND CHIEF 
            EXECUTIVE OFFICER, SUNTRUST BANKS, INC.

    Mr. Rogers. Thank you, Chairwoman Waters, Ranking Member 
McHenry, and members of the committee. Thank you for this 
opportunity to discuss the proposed merger of SunTrust and 
BB&T.
    I am Bill Rogers, chairman and CEO of SunTrust bank. I had 
the good fortune of joining this bank in an entry-level 
position in 1980 and to learn from leaders who believed if you 
build your community, you build your bank. At every step of my 
career I had the privilege of working with committed teammates 
in the service of our neighbors. I now have the distinct 
pleasure of leading this purpose-driven company.
    Today, we express our purpose as lighting the way to 
financial well-being. From the teller and loan officer to every 
function, we are motivated by putting clients, communities, and 
teammates on the path to financial confidence.
    This commitment extends beyond any regulatory requirement. 
Fulfilling our purpose is central to everything we do. We have 
helped millions of families purchase homes, finance their 
children's education, grow their small businesses, and save for 
retirement. We have backed great companies, financed community 
development, funded affordable housing, and expanded financial 
literacy.
    I am also proud of the passion and impact of our 
philanthropic efforts and workplace inclusion. Just last year, 
SunTrust teammates volunteered more than 200,000 hours in our 
communities and the SunTrust Foundation granted $19.5 million 
to help people.
    We have received recognition from numerous organizations 
for leading work to advance diversity. We are committed to 
becoming an evermore diverse and inclusive company and 
therefore a stronger one.
    In the area of financial wellness, we have done extensive 
research, and we offer a leading financial wellness program to 
200 other companies at no profit to SunTrust. So, purpose is 
more than words. We put it into practice.
    As we think about the future, we are keenly aware of the 
need for financial institutions to continue building trust 
among Americans that was strained during the financial crisis. 
We made serious mistakes during the crisis, and we let our 
clients and communities down.
    We have made dramatic changes in leadership and processes 
in close consultation with our regulators as we seek to earn 
the public trust for all of our efforts. This includes our 
operations, hiring and compensation practices, value system, 
risk management, and community support.
    So why the merger? I see the very real economic and human 
benefits of our work and want to continue our positive 
momentum. The primary reason for merging with BB&T is to team 
with a like-minded company whose mission is to make the world a 
better place to live. We both believe that our businesses and 
public impact will be better together.
    To be clear, SunTrust is a strong company with 7 
consecutive years of performance improvement. But in today's 
fast-changing environment, no successful company can stand 
still. We need to provide clients with tailored, intuitive 
banking services in the palm of their hand, with access to 
expert help, while competition grows by the day, compliance 
excellence increases by the hour, and cyber threats grow by the 
second.
    Our path forward is to align with a partner that values 
purpose, sound risk management, and technology, and we found 
that in BB&T. Our scale will allow us to compete more 
effectively, but also benefits the community we serve. Earlier 
this month, BB&T and SunTrust announced a Community Benefits 
Plan to lend or invest $60 billion to low- and moderate-income 
borrowers over a 3-year period. We also pledged to open at 
least 15 new branches in low- to moderate-income neighborhoods.
    Given our overlapping markets, we will be thoughtful in 
performing a market, branch, and client analysis before moving 
forward with any integration, prioritizing our service to low- 
and moderate-income clients and communities. We will reach out 
to clients to ensure that there is a smooth transition.
    With this merger, we plan to bring several hundred 
technology support jobs onshore and eventually support 
additional hiring. We know that every job matters. While we 
have agreed that all performing client-facing teammates and 
associates will retain a job, we recognize there will be 
impacts, and we will provide best-in-class programs for career 
transition and skill upskilling.
    Some have suggested this transaction will create an 
institution that is too big. With this merger, bigger doesn't 
mean riskier. Each company has a conservative risk profile and 
will maintain such as the combined entity. We are adding scale, 
not complexity.
    I have the utmost conviction that this merger of equals 
between two great companies positions us to better serve our 
clients, our local economies, and all those who count on us.
    Thank you, and I look forward to answering your questions.
    [The prepared statement of Mr. Rogers can be found on page 
63 of the appendix.]
    Chairwoman Waters. Thank you both.
    I now recognize myself for 5 minutes for questions.
    Mr. King and Mr. Rogers, after we made clear this committee 
would scrutinize your proposed merger, your two banks announced 
a 3-year Community Benefits Agreement last week in which the 
new bank will lend or invest $60 billion to low- and moderate-
income borrowers and in LMI communities also. This includes 
funding for mortgages, affordable housing, and small business 
loans, among other things.
    While this seems to be a positive step, I am concerned 
about reports that suggest it represents only a $3 billion 
increase beyond your most recent Community Reinvestment Act 
activity and that this is not a legally binding agreement.
    Mr. King, if the regulators require that you fulfill the 
$60 billion worth of promises as part of a conditional approval 
for the merger, would you object?
    Mr. King. Madam Chairwoman, we respect whatever conditions 
the Federal Reserve and other regulators impose on this 
transaction. We would certainly support any conditions that are 
required.
    Chairwoman Waters. Mr. Rogers, would you object?
    Mr. Rogers. Madam Chairwoman, we would not object.
    Chairwoman Waters. Mr. Rogers, SunTrust agreed in 2014 to 
pay $968 million over your bank's unlawful mortgage loan 
origination servicing and foreclosure abuses. This included 
providing relief for 48,000 consumers who lost their homes. 
When it mattered the most for thousands of struggling 
homeowners, SunTrust did not do its job in offering sustainable 
loan modifications.
    As you attempt to run a bank that is double the size while 
laying people off, will you dedicate more resources to loan 
modification options and take a much more proactive approach to 
helping struggling homeowners?
    Mr. Rogers. Chairwoman, no consumer should ever be taken 
advantage of. And we have committed already to increase our 
resources in the compliance area and in the loan modification 
area, and we will continue to do that as part of Truist.
    Chairwoman Waters. Thank you.
    I am very concerned about servicing, and not only with this 
merger and your banks, but in general, I think we have a lot of 
work to do in making sure that we have the kind of servicing 
that recognizes consumers are coming for help, asking for loan 
modifications.
    Some of the things that I learned when we went through the 
crisis, for example, was there were consumers who approached a 
bank and said, ``I cannot make my mortgage payments in the 
amount that I have signed up for, and so what I would like to 
do is reduce my mortgage payments. I can afford to pay 
something.'' For example, if the mortgage payment was $2,000 a 
month, they could perhaps pay $1,500 a month.
    And they were told that you have to be 2 months in arrears. 
And, of course, I think that is not helpful. I think if the 
consumer is coming in advance to talk about a potential 
problem, instead of saying, wait until you are in default, in 
essence, how can servicing--how would you respond to that? In 
your modification process, how would you help this consumer?
    Mr. Rogers. Chairwoman, I support that every consumer needs 
help. Many consumers are struggling today financially, and we 
play a role in that. Today, what would happen--
    Chairwoman Waters. Do you do your own servicing?
    Mr. Rogers. We do.
    Chairwoman Waters. Do you require that consumers be 2 
months in arrears before you can do a loan modification?
    Mr. Rogers. Chairwoman, we comply with the requirements of 
the servicing that we have for the GSEs. What happens today is 
if a consumer comes to us, they get assigned a representative 
who works with them on their individual situation, because 
every situation is unique and different and we support 
consumers being able to live a financial wellness and--
    Chairwoman Waters. I understand that. That is not a direct 
answer to my question, and I am really concerned about 
servicing and whether or not people in that situation would 
require that they have to do a refinance, et cetera, et cetera.
    But it seems as if what you are saying is you comply with 
whatever you think is supported by GSE requirements, et cetera, 
et cetera, et cetera, but you are not specific in an answer to 
that question.
    That is just one of the many questions about servicing that 
I have. I have been very concerned about servicing, whether it 
is done by the bank itself or whether it is contracted out. And 
we learned during the meltdown that consumers were very much 
disadvantaged.
    With that, I will yield back the balance of my time.
    And the gentleman from Missouri, Mr. Luetkemeyer, is 
recognized for 5 minutes.
    Mr. Luetkemeyer. Thank you, Madam Chairwoman.
    Just a couple of questions quickly to understand the 
structure of the new bank that you are going to be forming 
here, is this going to be a brand new charter? Or are you 
taking your existing charter and just changing it?
    Mr. King. Representative, we will be using the BB&T 
charter.
    Mr. Luetkemeyer. Okay. Is it a State bank charter then, or 
is it a national charter?
    Mr. King. It is a State, non-member bank charter.
    Mr. Luetkemeyer. Okay. So North Carolina will be the State 
banking organization that will oversee the bank from the State 
bank charter position.
    Mr. King. Representative, the primary prudential regulators 
will be the State banking commissioner of North Carolina and 
the FDIC. The holding company will be primarily regulated by 
the Federal Reserve.
    Mr. Luetkemeyer. So you will be a member of the Federal 
Reserve when you are done with this as well?
    Mr. King. We are not technically a member.
    Mr. Luetkemeyer. A holding company.
    Mr. King. But they will have oversight.
    Mr. Luetkemeyer. Okay. Very good.
    With regards to the capital of the new bank, are you going 
to have to issue any new stock or take any new stockholders in 
or is there enough capital between the two banks when you are 
merged to be able to make this all work?
    Mr. King. Representative, we have plans in place so that we 
will have adequate and very ample capital without having to 
issue any new capital.
    Mr. Luetkemeyer. Are you going to take anyone else on? Are 
you going to sell additional stock?
    Mr. King. No, we are not--
    Mr. Luetkemeyer. Do you anticipate selling additional stock 
at this point?
    Mr. King. No additional stock will be sold.
    Mr. Luetkemeyer. Okay. Very good.
    When the two banks merge, obviously you will need to have a 
vote of the stockholders. I assume that has taken place? The 
stockholders are all in favor of this?
    Mr. King. Yes, we are very much in favor of that. A 
stockholder vote will be held on July 30th.
    Mr. Luetkemeyer. Okay. Very good.
    So when you guys are merging, you wind up having to comply 
with the Bank Holding Company Act and the Bank Merger Act, is 
that correct?
    Mr. King. That is correct.
    Mr. Luetkemeyer. So there is Federal law in place that 
dictates how you do this from now on, and you have complied 
with that and you are ready to go basically?
    Mr. King. Representative, we comply with every single 
requirement of all of those Acts.
    Mr. Luetkemeyer. Very good. I appreciate that. I have heard 
that two or three times already. You are doing very good, Mr. 
King.
    With regards to your testimony, you list several reasons 
behind the merger. Among those reasons you stated the need to 
serve your customers amidst the climate of increased 
competition, compliance, and cyber threats.
    I guess my question would be, how important was Dodd-Frank 
and the additional compliance costs that you had to incur, both 
banks, to this decision that you made to be able to basically 
cut compliance costs? Was that a significant decision, part of 
the decision-making process?
    Mr. Rogers?
    Mr. Rogers. There was never an attempt to cut compliance 
costs, Representative. The benefits of this merger actually is 
we will get to increase our investments in compliance and use 
technology and other resources to be more effective in 
complying with all the regulations.
    Mr. Luetkemeyer. I know one of the situations that we have 
seen since Dodd-Frank has been instituted, is this mass exodus, 
this big merger process, which since the merger we have had 
1,812 mergers that have gone through, and we wind up with 
basically losing a bank or a credit union every day. And I am 
just curious how the Dodd-Frank Act impacted your decision 
here?
    Mr. King. Representative, the Dodd-Frank Act did not 
directly influence this decision, but there has been over the 
last number of years an increased level of regulation that has 
increased our cost, and our cost increases are a factor 
impacting the necessity in doing this merger.
    Mr. Luetkemeyer. Okay. What kind of costs are you incurring 
to be able to put this merger together? Would you be able to 
disclose that? Or is that something you can do?
    Mr. King. There will be a number of costs involved in 
combining the companies, changing signage, changing computers, 
and changing forms. Lots and lots of processes will need to be 
changed that are very expensive. That is all built into our 
economic forecast as we project to our shareholders and other 
constituents the benefits of the combination.
    Mr. Luetkemeyer. One of the concerns that I think some 
folks in the room have is with regards to size. And I think if 
you look at the business models of each one of your banks, they 
seem to be very similar. You still will be at a size that not 
necessarily can compete against the upper reaches of the 
financial services world in this country with regards to 
certain capital markets activities. I assume that you don't 
intend to do that.
    I assume you probably want to keep basically the same 
business model you had and continue to be basically just a big 
community bank. Is that a pretty good analogy of what I see 
happening here?
    Mr. Rogers. Representative, I think that is exactly a fair 
representation, is we are bringing two low-risk models 
together, as evidenced by our relative G-SIB scores, which are 
16 and 15 for our respective companies, compared to those in 
the hundreds of larger banks. So, these are two lower-risk 
profile companies, and we intend to maintain that as part of 
Truist.
    Mr. Luetkemeyer. Okay. I see my time is up.
    I yield back. Thank you.
    Mr. Lawson [presiding]. Thank you, sir.
    Now, the Chair will recognize the gentlewoman from New 
York, Mrs. Maloney, who is also the Chair of our Subcommittee 
on Investor Protection, Entrepreneurship, and Capital Markets, 
for 5 minutes.
    Mrs. Maloney. Thank you, Mr. Chairman.
    And I welcome the witnesses today.
    Today's hearing is necessary not only because this is the 
largest bank merger in recent memory, but also because of the 
regulators' apparent lack of interest in meaningful public 
participation in the merger review process. There is already a 
lack of confidence in the merger review process because the 
regulators seem to be only as rubber stamps by simply approving 
every merger that comes before them. But the utter disregard 
for community input, evidenced by both the Fed and the FDIC at 
the two so-called public hearings, is particularly troubling to 
me.
    So let me ask you, did you both testify at the public 
hearings in Charlotte and Atlanta?
    Mr. King, yes or no?
    Mr. King. Representative, yes.
    Mrs. Maloney. Mr. Rogers, yes or no?
    Mr. Rogers. Yes.
    Mrs. Maloney. Were you asked a single question by any 
regulator in attendance, yes or no?
    Mr. King?
    Mr. King. No.
    Mr. Rogers. Representative, we were not asked a question.
    Mrs. Maloney. Would it surprise you to learn that not even 
a single member of the Board of Governors at the Fed or the 
Board of the Atlanta Fed or the FDIC Board attended either the 
hearing in Charlotte or the hearing in Atlanta, or that the 
hearing was not live-streamed and that there is absolutely no 
digital record of it? I think it is an insult to the public and 
shows that the regulators don't take this hearing process 
seriously.
    There were over 100 community group witnesses on 21 
different panels at the 2 hearings, and yet not one single 
decision-maker from the Fed or the FDIC was there to hear them 
or to participate or to take notes or to participate in any 
way.
    Mr. Chairman, I am going to suggest that the Fed and the 
FDIC pause their review of this merger until they can have 
hearings where the actual decision-makers hear directly from 
the public about the suggested merger. But it is this lack of 
interest by the regulators that forces us to have this hearing 
today so we can talk to you about the issues the public really 
cares about in this merger.
    So now let's talk about one of those issues which the 
public cares deeply about, and that is gun violence. As you 
both said, this is a merger of equals, which means in some 
cases, BB&T's policies will win out, and in other cases, 
SunTrust's policies will win out.
    One area where the two of you disagree and have very 
different policies is in how you engage with the gun industry. 
SunTrust has a very careful screening process where different 
committees examine the transaction, and transactions with gun 
manufacturers are almost always denied.
    BB&T, on the other hand, has no specific gun policy and has 
actually done a substantial amount of business with the gun 
industry. Between 2012 and 2017, BB&T arranged over $147 
million in loans to gun companies, and this is according to the 
research from Guns Down America.
    Mr. King, this industry is responsible for the deaths of 
thousands of Americans every year. It has been described as an 
epidemic. We are one of the few countries where we literally 
have violence in our schools and mass shootings. We have an 
epidemic in this country of gun violence. And by continuing to 
lend money to the manufacturers of military-style assault 
weapons and magazines, your bank is contributing to this 
horrible, I would say, epidemic in our country.
    So, Mr. King, my question is, will you commit to adopting 
SunTrust's responsible lending policies when it comes to 
business relationships with the gun industry?
    Mr. King. Representative, we abhor all forms of violence. 
We are saddened by the tragedies that are happening around our 
country today with regard to gun violence and all of the forms 
of violence, especially when it affects our youngest children 
in the schools. It makes me personally very, very sad.
    Mr. Lawson. The gentlewoman's time has expired. Thank you.
    Our next--
    Mrs. Maloney. Would the gentlemen be able to answer this 
question? Will he follow SunTrust's policies or ignore them? I 
am just curious.
    Can you answer yes or no? Will you follow SunTrust's 
policies?
    Mr. Lawson. Mrs. Maloney, the time has expired.
    Mrs. Maloney. Okay. I yield back.
    Mr. Lawson. Thank you.
    I now recognize the gentlewoman from Missouri, Mrs. Wagner, 
for 5 minutes.
    Mrs. Wagner. I thank the Chair for yielding.
    Dodd-Frank, let's be very clear, created a world in which 
size equals survival. The Democrats' law reduced competition in 
the banking sector. It imposed barriers to entry for de novo or 
new charter banks and saddled financial institutions with 
approximately 400 new requirements that hit small, mid-sized, 
and regional banks particularly hard. In short, Dodd-Frank 
concentrated more risk in the nation's largest institutions and 
incentivized them to be as large as they are today. That is the 
direct result of Dodd-Frank.
    I have some questions, some yes or no, for both of you. We 
will do a little rapid fire here, and there will be an 
opportunity for you to elaborate also, gentlemen.
    Mr. King and Mr. Rogers, is there sufficient competition in 
banking? Yes or no?
    Mr. King. Yes.
    Mr. Rogers. Representative, yes.
    Mrs. Wagner. What about among community and mid-sized 
institutions, sufficient competition?
    Mr. King?
    Mr. King. Yes, Representative.
    Mr. Rogers. Representative, yes.
    Mrs. Wagner. Now you can elaborate a little bit. Mr. King, 
how has competition changed since Dodd-Frank? And what would 
competition look like a decade from now?
    Mr. King. Representative, that is an excellent question. 
Competition has changed dramatically since Dodd-Frank, and it 
is primarily around the dramatic changes in technology.
    Our world is changing really, really fast. We all see that 
through Amazon and other changes in the retail industry and 
other industries. It is profoundly changing our industry.
    As I said in my opening statement, historically, for most 
of my career in banking, if you had a good branch-friendly 
touch type of relationship with your clients, that was 
satisfactory. That is no longer okay. Today, you have to have 
huge investments in technology to meet the requirements of 
consumers, which is real-time satisfaction.
    Mrs. Wagner. Mr. Rogers, could you briefly talk about that?
    Mr. Rogers. Representative, thank you.
    I would say also the competition is not only from banks. 
The competition has also come from fintech companies.
    Mrs. Wagner. Yes.
    Mr. Rogers. It has come from a variety of different 
outlets.
    So the ability to compete, as Mr. King described, from a 
technology standpoint and a service standpoint, it is not just 
banks. It is that the field of competition has expanded quite 
significantly.
    Mrs. Wagner. So competition has changed, most particularly 
for community and midsized institutions.
    In your industry broadly, Mr. King, what effect has Dodd-
Frank had on community and regional banks?
    Mr. King. Representative, I believe Dodd-Frank, broadly 
speaking, has increased the requirements in terms of all of our 
activities. It has increased our costs.
    Now there are many aspects, I should quickly say, that are 
very good about Dodd-Frank. So, I am not ridiculing the entire 
bill. I am saying that it did, in fact, increase our costs.
    Mrs. Wagner. And what kind of effects did this have as a 
result on consumers?
    Mr. King. The effect on consumers, Representative Wagner, 
is to cause the process to be more burdensome in terms of time 
and documentation in many cases, especially in the mortgage 
area. And as a result of that, it drives up our costs, and in 
some cases that cost is passed along to--
    Mrs. Wagner. Mr. Rogers?
    Mr. Rogers. I think, Representative Wagner, that there are 
many things in Dodd-Frank that were positive for our industry 
in terms of elements like stress tests and building more 
capital in the banking system which makes us much more solid 
today than we were pre-crisis.
    Mrs. Wagner. Are consumers better off now than they were 10 
years ago?
    Mr. King?
    Mr. King. Representative Wagner, I would say in some cases 
they are, and in some cases they are not.
    Mrs. Wagner. Mr. Rogers?
    Mr. Rogers. Representative, in some cases I believe 
consumers are having much more access to technology. And I 
think the reasons we are here to talk about this merger is to 
be able to invest in the type of activities that will benefit 
consumers going forward.
    Mrs. Wagner. That is certainly what I care about, the 
benefit and the cost to consumers, and to those consumers who 
are in Missouri's Second Congressional District.
    What do you believe, briefly, in my time I have left, are 
some of the greatest issues facing regional banks today?
    Mr. Rogers?
    Mr. Rogers. I think some of the greatest issues are related 
to cyber threats, being able to invest and keep up, being able 
to invest and keep up with the largest banks in the country, to 
be competitive in products and services and capabilities.
    Mrs. Wagner. Mr. King?
    Mr. King. I would say I agree with Mr. Rogers. Cyber is 
number one. Very much related is having the scale to be able to 
invest in the technology, to be able to provide the kind of--
    Mrs. Wagner. The scale, did you say?
    Mr. King. The scale.
    Mrs. Wagner. The scale. So size--
    Mr. King. Size.
    Mrs. Wagner. --sadly, is equaling survival.
    I yield back. Thank you.
    Mr. Lawson. Thank you.
    At this time, I am going to recognize the gentlewoman from 
New York, Ms. Velazquez, for 5 minutes.
    Ms. Velazquez. Thank you, Mr. Chairman.
    Mr. King, you didn't have the opportunity to answer Mrs. 
Maloney's question, and I believe that it is an important 
question. So would you adopt SunTrust's policies on business 
with the gun industry, yes or no?
    Mr. King. Representative, our policy is to try to help our 
clients achieve economic success and financial security 
according to the laws of the land.
    Ms. Velazquez. So, that is a no.
    Mr. King and Mr. Rogers, under the proposed merger, will 
all of those employees who are looking to stay with the new 
institution be able to stay?
    Mr. King. Representative, we made a pledge on day one that 
all of our performing, client-facing associates will have a 
job.
    Ms. Velazquez. Is that all?
    Mr. King. It is performing, client-facing people who deal 
directly with clients.
    Ms. Velazquez. Yes, but I am asking about all of the 
employees who want to stay. Will they be able to stay?
    Mr. King. Representative, there will be changes in 
combining the two companies.
    Ms. Velazquez. Okay. Thank you.
    Mr. King. And during these changes--
    Ms. Velazquez. Thank you. I hear you.
    Mr. Rogers?
    Mr. Rogers. Yes, there will be changes and some 
consolidations. Some employees won't want to move to a 
different geography. Some may not have skills for a different 
job.
    Ms. Velazquez. Okay. Thank you. I hear you.
    So for those who might need to relocate, what kind of 
assistance will be provided to them?
    Mr. Rogers. We have an excellent relocation package. We 
have merged the best of both companies and created, I think, an 
exceptional relocation package.
    Ms. Velazquez. And for those employees who have the 
unfortunate luck of having to look for a new job, what type of 
compensation assistance will be provided?
    Mr. Rogers. We have a severance package, which is 2 weeks 
for every year of service with a minimum of 8 weeks. But, most 
importantly, each impacted employee will get outplacement 
services. They will get one-on-one coaching and the ability to 
find a job someplace else.
    Ms. Velazquez. Thank you for that answer.
    Mr. King, for 2017, BB&T's CEO pay ratio, which measures 
the discrepancy between your annual compensation and that of 
the median employee at your bank, was a remarkable 150 to 1; 
while, Mr. Rogers, the CEO pay ratio at your bank for 2017 was 
even wider, 159 to 1. Most Americans find these ratios 
unacceptable.
    Do you believe these ratios are fair, Mr. King?
    Mr. King. Representative, my compensation is established by 
our board--
    Ms. Velazquez. I know.
    Mr. King. --with the advice of an outside consultant and it 
is aligned with the long-term performance of the company.
    Ms. Velazquez. Mr. Rogers?
    Mr. Rogers. Representative, I have been very fortunate. I 
started my career with this company. And I want to provide that 
same kind of opportunity to anyone who starts with Truist that 
they have that same--
    Ms. Velazquez. What about if we start raising their 
salaries?
    What is the starting salary at each of your banks right 
now? And then, under the new institution, what will be the 
starting salary of an employee?
    Mr. King. Representative, we recently raised our minimum 
compensation to more than twice the Federal minimum wage.
    Ms. Velazquez. And that is?
    Mr. King. That is a little over $15, which is about 
$31,000--
    Ms. Velazquez. Okay. I know that Bank of America also 
headquarters in Charlotte, and they just announced that they 
committed to raise the minimum wage to $20. Would you both be 
committed to raising the minimum wage to $20?
    Mr. King. Representative, we study that all the time. Each 
institution is different in terms of their location, and what 
the cost of living is in terms of their employees and where 
they live. We study that all the time. We want to be sure we 
are paying--
    Ms. Velazquez. Will the merger produce savings by reducing 
the number of employees at the new institution?
    So do you think it is fair to use that money to raise the 
salary for those--the starting salaries of your employees so 
that we reduce the wage gap that exists between the CEO and 
those employees?
    Mr. Rogers. Representative, when we merge, we have elected 
to pay $71 million in compensation to anyone of a certain level 
in our company to send the positive message that we care about 
them and we care about their future.
    Ms. Velazquez. How about you care about those with the 
starting salary, those who are making only--
    Mr. Lawson. The gentlelady's time has expired.
    Ms. Velazquez. --$15 minimum wage?
    Mr. Lawson. The gentlelady's time has expired.
    Ms. Velazquez. I yield back.
    Mr. Lawson. Thank you.
    I now recognize the gentleman from Michigan, Mr. Huizenga, 
for 5 minutes.
    Mr. Huizenga. Thank you, Mr. Chairman.
    I appreciate the opportunity, and I appreciate you 
gentlemen coming here.
    I am just trying to do a little research. You are hearing 
the other side who clearly wants to have a system of smaller 
banks in the belief that somehow it is magically safer. I am a 
car guy from Michigan. We have all the Tier I, Tier II, and 
Tier III automotive suppliers, and we watch that industry 
pretty closely.
    I was consulting with my friend, the preeminent car dealer 
of Texas, right down here in the row ahead of me. Don't give 
him an opportunity. He will try to sell you something.
    But we were talking a little bit about sort of the analogy 
between banking and automotive, and it seems to me that we have 
some examples where bigger isn't necessarily better, but 
smaller isn't necessarily better.
    And sometimes, both can be excellent. Two German cars, 
where you have BMW and Volkswagen, they are drastically 
different in size, drastically different when you are even 
Chrysler or the old iteration of Chrysler to GM, very different 
in size. And it really is about risk-taking. It is about 
management. It is about a number of those other things.
    And as I was looking at the makeup of your two banks--and I 
have to admit, from Michigan, neither one of you have branches 
in Michigan. I think the closest that anyone gets is BB&T, with 
some branches in Ohio and Indiana, and the only connection 
really with SunTrust is all the Michiganders who go down to 
Florida in January, February, and March. So, I am familiar with 
SunTrust that way.
    But according to 2018 records, BB&T, you had $225 billion 
in assets. SunTrust had $216 billion. And as I was looking at 
that, it just struck me how significant a gap there is between 
the truly large financial institutions that we have here in the 
United States, $2.7 trillion for JPMorgan Chase, Bank of 
America $2.3 trillion, with a ``t,'', that is 12 zeros for 
everybody watching, Citibank, $1.9 trillion, Wells Fargo, $1.8 
trillion. Then, the fifth largest bank is Goldman Sachs, $925 
billion, which wasn't a bank until Dodd-Frank made it a bank. 
Morgan Stanley, $875 billion--again, it wasn't a bank until it 
was made a bank. And then, it drops down to U.S. Bank at $475 
billion.
    Your merger is going to put you somewhere between sixth, 
maybe seventh, maybe eighth, depending on what is going to be 
happening. And I think it was you, Mr. King, in your testimony 
on page 6, you talked about this, and when Mr. Luetkemeyer 
touched on it, your systemic risk testing scores received a 15 
and 16, respectively, while other institutions scored well over 
400, more than 20 times riskier than your particular 
institutions, is that correct?
    Mr. King. Representative, that is exactly right, and that 
is because of the major differences in the way we operate.
    Both of our companies are what we call Main Street banks. 
We basically serve the--
    Mr. Huizenga. In a common vernacular, it might be plain 
vanilla.
    Mr. King. Plain vanilla.
    Mr. Huizenga. So, you are not doing exotic things 
internationally?
    Mr. King. We are not doing international transactions. We 
are not doing exotic types of domestic transactions. We are 
focusing primarily on the businesses and consumers in our 
market.
    Mr. Huizenga. And that is why you have 15 and 16 on your 
scores, is that right, Mr. Rogers?
    Mr. Rogers. That is correct. Those scores are based on 
international exposure and interconnectiveness and other 
elements that just don't exist with the risk profile of our 
individual banks or our proposed combined bank.
    Mr. Huizenga. So, you are not Goldman Sachs. You are not 
Morgan Stanley.
    Mr. Rogers. Representative, that is correct.
    Mr. Huizenga. You are not JPMorgan Chase. You are not Bank 
of America. You are not Citibank. You are not trying to compete 
internationally with large major institutions around the world.
    Mr. King. Representative, that is exactly right. But what 
we do is very much needed in our country today.
    Mr. Huizenga. As a small business owner, I wholeheartedly 
agree. And as my seconds are ticking down, that is the kind of 
banking service that we need as small business owners and as 
entrepreneurs.
    Mr. Lawson. The gentleman's time has expired.
    Mr. Huizenga. I appreciate your time. Thank you.
    Mr. Lawson. Thank you.
    Now, we are going to hear from the gentleman from New York, 
Mr. Meeks, who is also the Chair of our Subcommittee on 
Consumer Protection and Financial Institutions. You are 
recognized for 5 minutes.
    Mr. Meeks. Thank you, Mr. Chairman.
    Mr. King, Mr. Rogers, thank you for being here today.
    As I said in my opening statement, I am concerned about the 
future of banking. The banking landscape is changing rapidly, 
and I expect that the pace of change will accelerate moving 
forward.
    So my concern then is with all the mergers, et cetera, will 
there be a space? In fact, what will be the place for community 
banks and minority depository institutions in the American 
banking landscape and future? And how would those small banks 
be competitive in a market where the scale and technology 
investments dominate as your merger would do? I ask both of 
you.
    Mr. King?
    Mr. King. Well, Representative, your concern is shared by 
us. There are a lot of changes going on in the world today that 
are impacting our industry that make it very challenging for 
banks like us and, frankly, smaller institutions to be able to 
survive and thrive.
    We are competing against very large Wall Street firms, and 
they have the scale and capacity, particularly in technology, 
to make it very difficult for us. That is exactly why we need 
to combine to be able to have the scale and capacity to be able 
to compete effectively in our markets.
    Mr. Meeks. Mr. Rogers, do you want to add anything to that?
    Mr. Rogers. Representative, I believe that the banking 
ecosystem has room for many sized banks with many different 
objectives. Our job is not to exclude community banks. We think 
they can continue to be competitive, minority banks can 
continue to be competitive, we want to support CDFIs, because 
they are all part of that community ecosystem of which we are a 
part.
    Mr. Meeks. So what I am seeing is, because sometimes--and I 
said fintech solutions offer promise--but also, this crowding 
of markets with an abundance of options is good for some, but 
my concern is about those who are left behind--the elderly, 
rural communities, urban poor, banking deserts, they are left 
behind.
    The other concern I have is in regards to small-dollar 
lending. I am concerned about the number of American families 
caught in payday loan debt traps. Forty percent of Americans 
cannot afford a $400 emergency without selling something or 
borrowing money. And the CFPB rescinded the ability-to-repay 
requirement, which I think would have been critical to stop the 
cycle of debt traps that is bankrupting many Americans.
    How can we get more banks? How would you get more actively 
engaged in small-dollar lending to break this harmful cycle of 
debt traps and payday lending if your merger went through?
    Mr. King. Representative, we are very concerned as well. We 
are working on several things to try to help with regard to 
that, and, frankly, our combination will allow to us do even 
more.
    We are very much in favor of having a small-dollar 
affordable loan program, and we are making efforts to try to 
get that approved by the regulators to be able to do that. That 
is a very important need today.
    As Mr. Rogers said, we believe one of the ways we can help 
the smallest communities, in addition to our own presence--and 
by the way, our combined institution will have more rural 
community branches than all the top 4 banks by size combined. 
So we too are a community back and we will continue to serve 
the small community.
    But we want to support them in different ways. CDFIs are 
one of the most important ways to meet small businesses and 
other community needs in those areas, and we want to find ways 
to support the CDFIs as a part of this process.
    Mr. Meeks. Let me ask this one more time, because I have 
asked it already. The prudential regulators are considering a 
process to modernize the CRA, which is important, and generally 
you had a physical bank located someplace else. So I am 
concerned that CRA compliance is increasingly being decoupled 
from community outcomes. What would you say? How would you look 
at the implementation or the modernization of CRAs so that does 
not happen?
    Mr. Rogers. I think, Representative, that is an excellent 
point, and I think modernization of CRA often gets confused 
with lessening of CRA. We are actually very much in support of 
modernization of CRA so we can do more and we can do it better 
and we can do it more effectively.
    I think there are many opportunities to put forth 
technology solutions and other ways of reaching communities 
that can't be reached physically, and I think one of the 
benefits of this merger is our opportunity to do that.
    Mr. Meeks. Thank you.
    I only have 2 seconds, so I yield back the balance of my 
time.
    Mr. Lawson. Okay. Thank you.
    Now, I recognize the gentleman from Wisconsin, Mr. Duffy.
    Mr. Duffy. Thank you, Mr. Chairman.
    Welcome, gentlemen. I am up here on your left-hand corner.
    If you guys follow the law, you work with the regulators, 
and you work with the Department of Justice, and you get 
approval, do you think that this merger should go forward?
    Mr. King. Representative, I absolutely do.
    Mr. Duffy. Mr. Rogers, do you believe so?
    Mr. Rogers. Representative, I do, yes.
    Mr. Duffy. So let's say that there are a few people in 
America who are going to protest and say this is a horrible 
merger, bigger banks are bad, smaller banks are better, that 
Congress needs to intervene and say this shouldn't take place 
even though you followed the law.
    Would that be fair to you, Mr. Rogers?
    Mr. Rogers. Representative, I think we will follow the 
law--
    Mr. Duffy. Would that be fair?
    Mr. Rogers. I don't think that would be fair. Because I--
    Mr. Duffy. I don't think so either. If you follow the law, 
the Congress shouldn't intervene and say, oh, no, Mr. Rogers 
and Mr. King, your two banks can't merge. But, guess what, Mr. 
Rogers, you have policies in your bank that say if we have 
detention facilities that are caring for children or detaining 
individuals who we may not know who they are, following 
American law, you say I am not going to bank them. Is that 
fair?
    Mr. Rogers. Representative, we consider a variety of 
factors--
    Mr. Duffy. Is it fair?
    Mr. Rogers. --in making those decisions.
    Mr. Duffy. Is it fair?
    Let me ask you a different--do you think that detention 
facilities are concentration camps? Yes or no?
    Mr. Rogers. Representative, I have never used that 
characterization.
    Mr. Duffy. Okay. How about ICE, are ICE Nazis?
    Mr. Rogers. Representative, I have never used that 
characterization--
    Mr. Duffy. So you have ICE and you have some of their 
contractors that are following American law, and you-all tell 
us, I want to keep Americans safe. On the banking side, we are 
not a risk to anybody. But Mr. Rogers, you like, no, I want 
open borders. I don't want us to detain anybody in America. I 
don't want us to follow the law. Open borders, let everyone 
come in without any processes.
    Is that your position at SunTrust?
    Mr. Rogers. Representative, we are not taking a social 
position.
    Mr. Duffy. You are not taking a social position when you 
say you won't bank a detention facility?
    Mr. Rogers. Representative, we consider a variety of 
different factors in reaching those conclusions related to the 
status of that business, the creditworthiness, the 
survivability of those businesses and--
    Mr. Duffy. So a contract with the U.S. Government, you 
don't seem to be a good risk. Come on. You are making a social 
policy judgment, and you are saying, because I was protested or 
because I have a social viewpoint, I am not going to bank a 
detention facility that, by the way, some of them hold minors 
and we don't know where to send these children. We have to wait 
and find an adult who will take the child. And we have to hold 
them--
    Do you want us to send them out on the streets? And you 
say, no, no, I am not going to fund a detention facility that 
might hold kids before we can find an adult to take the child; 
that is opposed to our social policy. Or, I don't know who is 
coming. Are they terrorists? Are they drug dealers? Are they 
gang members? We don't want America to hold them. We want them 
released in our community. That is the position of your bank, 
and I guess that concerns me. That concerns me.
    And I would give kudos to BB&T, Mr. King, you say, if you 
abide by the law, we will bank you, if you are a good risk. If 
you go through the banking procedures, the risk analysis, and 
if you follow the law, you can do business with us. And I think 
that is the right model. Just like I don't think we should 
sandbag this merger because some people don't like it. If you 
follow the law, and by the way, I support your merger, I think 
you will be a great bank together. I think you have two great 
businesses. It should happen if you follow the law.
    And you should bank, Mr. Rogers, everyone who follows the 
law.
    One other point. I only have a minute left.
    You asked about pay ratios. I don't know if you guys have 
done the analysis on the pay ratio of the lowest paid employee 
with the Lakers and, you know, LaBron James, or with the Green 
Bay Packers and Aaron Rogers. Those pay ratios are huge. But 
guess what? You pay for performance. And if you two can't 
defend your pay, you can't look up here and say we should 
defend it.
    The best talent and the best banks rise to the top. And we 
want the best talent there, because when we don't have great 
talent, bad things can happen like what happened in 2008.
    And so maybe you are not paid enough; maybe you are paid 
too little. But you should be able to come in here and say, ``I 
am worth every cent.'' Just like LeBron James and Aaron 
Rodgers, they are worth every cent they are paid. And if you 
can't defend it, we won't defend it for you. But there are a 
lot of spaces we can look at pay ratios that would look a 
little out of whack.
    Get people on the wrong end of the banking industry, they 
don't end at 15, they start at 15. And, again, to the two of 
you, I--
    Mr. Lawson. The gentleman's time has expired.
    Mr. Duffy. And good luck to the both of you, but hopefully 
you bank all legal--
    Mr. Lawson. The gentleman's time has expired.
    Mr. Duffy. --in America. Good luck.
    Mr. Lawson. I now recognize the gentleman from Georgia, Mr. 
Scott.
    Mr. Scott. Mr. Rogers, how are you?
    Mr. Rogers. Representative--
    Mr. Scott. I must say, Mr. Rogers, when I first heard of 
this merger and you are moving your headquarters from my 
beloved State of Georgia up to another beloved State in North 
Carolina, but not quite as loved as Georgia, it literally broke 
my heart. And it broke the heart of a lot of folks in Georgia. 
And that is largely because of the rich history, the legacy, 
all of the great things that you have done to make Georgia and 
Atlanta that shining light on the hill that enabled the whole 
world to see our great works.
    But right now, I want to ask the first question, because I 
am sure the people of Georgia would want to know, first of all, 
how many jobs would Georgia lose with this merger?
    Mr. Rogers. Representative, thank you for your kind 
comments about our heritage.
    We don't know the exact number. As you know, with this 
merger, there are things that we cannot discuss and cannot 
fulfill--
    Mr. Scott. Let me ask you this now. Let me get a little 
specific. I read some material here.
    For example, you two have stated that you will have 740 
SunTrust and BB&T branches located within 2 miles of another 
branch, making them key targets for closure. You are not going 
to have one bank branch 2 miles from another, 740.
    So my question is, how many of these branches that are 
located within 2 miles of another branch are in the greater 
Atlanta, Georgia, area?
    Mr. Rogers. Representative, I would have to get back to you 
with that exact number. We will reiterate what we said earlier, 
that for every branch teammate who is facing a client, we have 
assured them that they have a job. So for those who are in 
branches, they are not in fear of losing their jobs.
    Mr. Scott. Those who are in branches are not in fear of 
losing their jobs? How can you say that when you have 740 
branches just 2 miles apart? Are you are going to keep all of 
those open?
    Mr. Rogers. Representative, the nature of our business is 
we have about a 28 percent turnover annually in terms of those 
businesses. So we are able to say with confidence to the 
employees who are in those branches that if we do consolidate 
their branch, there will be another opportunity in another 
branch, hopefully in close proximity, for them to be employed.
    Mr. Scott. You use the term, ``client facing,'' that those 
job losses will be minimal.
    What do you mean by ``client facing?''
    Mr. Rogers. Representative, client facing is someone who 
interacts directly with a client every day. So if you think 
about a--
    Mr. Scott. A bank teller?
    Mr. Rogers. You think about a bank teller, you think about 
a loan officer, you think about the people who interact every 
day with our clients.
    Mr. Scott. How many people in Georgia, do you know, would 
require relocation, leave our State?
    Mr. Rogers. Representative, I don't know that number today, 
because some of those decisions haven't been made yet about 
what official jobs, and duties, and responsibilities may be in 
Georgia or may be in other parts of our country.
    We did, however, commit that large parts of our business, 
our wholesale business, for example, our corporate business, 
will be headquartered and located in Atlanta.
    Mr. Scott. Okay. And finally, I want to ask you, I was home 
over the weekend. My brother-in-law, Hank Aaron, who is with 
the Braves asked me, ``What is going to happen with the name of 
this stadium?'' Hank, of course, works up there, along with a 
lot of other people. And that stadium is in my district, along 
with Barry Loudermilk's district. It is the major economic 
engine in that area. You made a big commitment there.
    So we want to know, because we are on our way to the World 
Series, and that is important. So what will my constituents in 
Cobb County now call the home of the World Champions, Atlanta 
Braves?
    Mr. Rogers. Representative, we have no better relationship 
than with the Atlanta Braves. And we have every intention of 
working closely with them to rename that park associated with 
our new name.
    Mr. Scott. What will the name be?
    Mr. Lawson. The gentleman from Georgia's time has expired.
    Mr. Scott. Home of the Braves.
    Mr. Lawson. I will get my composure back.
    The gentleman from Ohio, Mr. Stivers, is recognized for 5 
minutes.
    Mr. Stivers. Thank you, Mr. Chairman.
    Good morning. Thanks for being here.
    I want to focus my questions on the impact of your merger 
on customers, because I think that is what this should be all 
about.
    This merger will give you more scale. It will give you a 
chance to be more competitive. It will give you a chance to 
invest in some things. In your written testimony, you spoke a 
little bit about how you will be able to invest in technology.
    Can you talk about how that will serve your customers of 
the new combined organization?
    You can start, Mr. King, and maybe both of you can comment 
on it a little bit.
    Mr. King. Thank you, Representative.
    The world has changed so much today that the investment in 
technology is required to provide what I call real-time 
satisfaction. So for consumers today and small businesses, it 
is absolutely a requirement that they be able to do what they 
want to do, when they want to do it, where they want to do it, 
right here, right now. That is a really huge change. And 
massive amounts of technological investment dollars are 
required to be able to meet that need.
    By combining these companies, we will be able to make those 
types of investments and have not only what is required but 
hopefully be able to meet and even exceed the expectations of 
our business clients and consumers.
    Mr. Rogers. Representative, I would support what Mr. King 
said. The consumer is in charge. And their demands are 
increasing exponentially based on their interactions with 
businesses outside of financial services. And it is imperative 
that we meet that standard that is set by others, because that 
is what the consumer expects of us.
    Mr. Stivers. Many observers believe the biggest threat to 
our financial system today is cybersecurity. Will this merger 
give you the ability to invest more in cybersecurity readiness?
    Mr. King. Representative, it will indeed. We have increased 
our investment in cybersecurity risk mitigation, but we will 
increase it even more with this combination, because we will 
simply have the scale to be able to afford to do it.
    Mr. Rogers. Representative, that was one of the very first 
things that Mr. Kelly and I talked about when we thought about 
this merger, because we had a very shared view about the 
importance of providing security for our consumers and our 
customers and our employees. So, cyber will be a big focus and 
a strong area of investment and opportunity.
    Mr. Stivers. Tell me how you will be able to invest more in 
our communities. I think your commitment is $60 billion over 
the next 3 years in low- and moderate-income communities after 
the merger.
    Does this combined organization give you the scale to be 
able to do more in low- and moderate-income communities? And 
what does that mean toward helping those folks in low- and 
moderate-income communities achieve the American Dream?
    Mr. King. Representative, the way I think about that, the 
way we think about that, is to help these communities, which we 
are deeply committed to, is to first provide better housing.
    As I alluded to in my opening statement, when you have 
housing insecurity, it is very difficult to meet the day-to-day 
requirements of trying to just live and to hold down a job.
    The second is to have better jobs. And the third is to have 
better education. And we are deeply committed to housing, new 
jobs, and education for all of our communities, but especially 
our smaller, rural community areas.
    Mr. Rogers. Representative, when Mr. King and I first 
started talking about this merger, we coined a phrase that it 
had to be for something, so not just to achieve efficiencies 
but to improve the lives of the communities that we serve. And 
that has been our commitment day one from the dialogue with 
this merger. And I think as evidenced by the community benefits 
plan, but that is just one step. This will be a cornerstone of 
the approach that we take with our great new company.
    Mr. Stivers. Great. And I appreciate your commitment to 
improving the lives of the customers that you serve.
    And I think, Mrs. Wagner, when she started, talked about 
the very competitive environment that you work in and serve in 
and work with customers in, and you have some competitors that 
have different advantages.
    And, unfortunately, the regulatory environment that we live 
in has forced you to gain scale, to get efficiency and be able 
to invest in not only technology, but our communities. But I 
think together you are going to be a great company, and I 
appreciate your commitment to serving your customers. And I 
hope you will keep that at the forefront, not just in the 
merger, but all the way going forward. And I know, given the 
competitive landscape you compete in, you will have to keep 
that in the forefront.
    Thank you. I yield back.
    Mr. Lawson. Okay. Thank you.
    Now, the Chair recognizes the gentleman from Massachusetts, 
Mr. Lynch.
    Mr. Lynch. Thank you, Mr. Chairman.
    Gentlemen, it's good to see you. I am worried about the 
trend. I understand what you are faced with. But as Mr. Scott 
pointed out, BB&T has 1,800 branches, and SunTrust has 1,100 
branches. As he noted, you have 740 branches that are less than 
2 miles apart.
    We all know, and you have conceded that there will be 
changes in consolidation. Branches are going to close. Probably 
half of these that are so--well, when you have 740 banks, 2 
miles apart, some of those banks are going to close.
    And what I worry about is the choices of the consumers in 
that area. You are in a pretty consolidated geographical area, 
most of your banks. And so consumers are going to be in a less 
flexible environment if this merger goes through; they are 
going to have to go to your bank. And I just worry about 
pressure on the interest rates and loan opportunities.
    I see that BB&T is into mobile banking. Is SunTrust into 
mobile banking as well?
    Mr. Rogers. Representative, we are.
    Mr. Lynch. Yes. And I understand that is consumer 
preference. But what is happening here is my community banks 
are going to go out of business. And I know that is what you 
are faced with right now. But this is the road we are going 
down.
    Small credit unions are going to go out of business. They 
don't have the money to launch these mobile banking platforms. 
Smaller community banks don't have that opportunity as well.
    I have heard my Republican colleagues blame the Democrats 
for making banks bigger. But then at the end of their comments, 
they all speak in favor of making the banks bigger. You can't 
have it both ways.
    And so we all represent some areas that are suburban and 
rural. I worry about those communities when those banks go 
away. Think about that. Think about how generous and good a lot 
of the smaller banks are and how interwoven they are into the 
fabric of our communities.
    And I am not saying you are doing this by choice. I think 
you are probably doing it because you think you have to. But 
you are still going to be a pretty big bank, probably the sixth 
biggest in the United States, but that doesn't mean it is a 
good thing for the consumer or for the towns or cities that you 
are located in. That is my problem.
    And if we approve this or signal approval for this, there 
are going to be a couple more bankers coming in here in a few 
months with another merger, and these banks are going to get 
bigger and bigger.
    And I just don't think--the antitrust formula that has been 
approved by the Supreme Court doesn't recognize the damage to 
consumers and the damage to communities. They just look at a 
very limited set of factors.
    I am not blaming you, but I am saying that what you are 
asking for contributes to the problem.
    And it is going to require another couple of banks, after 
you get approved--and I notice that--I think it was the Fed 
that raised the amount of money, the number of assets that 
would trigger higher regulatory scrutiny, and I imagine that is 
a factor in this as well.
    But we are just going to have fewer and fewer banks out 
there, greater concentration. I don't think it is good for 
America. I don't think it is good for the American people. I 
don't think it is good for the fabric of our society to have 
this happen. And it is putting more and more power in fewer and 
fewer hands. That is the problem.
    And that is the problem with Facebook. That is the problem 
with Amazon. It is actually antidemocratic. I don't want to lay 
this all in your lap, but this is part of the problem. What you 
are trying to do right here today is part of the problem. You 
were forced to do it. I understand that. You didn't make this 
up. You are just responding to conditions.
    But, I don't even have a question for you. I just think you 
are doing what you have to, so I am not going to beat you up 
over it. But I am just pointing out that this is wrong. This is 
the wrong direction for this country to be going in. It is not 
good for the American people, not good for the American 
consumer, takes more power away from them and puts them at the 
mercy of larger and larger banks.
    I yield back.
    Mr. Lawson. Thank you.
    The Chair now recognizes the gentleman from Kentucky, Mr. 
Barr.
    Mr. Barr. Thank you, Mr. Chairman.
    Mr. King, Mr. Rogers, thank you for being with us today to 
describe why this merger is happening and what impact this will 
have on consumers.
    You both have indicated that this merger is in part a 
technology play intended to provide two Main Street banks with 
resources to do what they have always done in an era where 
technology has made the financial services sector much more 
competitive.
    Mr. Rogers--no, let me start with Mr. King.
    BB&T has a significant and important presence in Kentucky. 
Tom Eller, your Kentucky regional president, is a good guy. I 
have met him and I know you have confidence in him. And Laura 
Boison does a great job in the Lexington market region, which I 
represent.
    SunTrust, Mr. Rogers, does not have a presence in Kentucky. 
What does this merger mean for Kentucky and how will Truist 
serve BB&T customers in Kentucky? And I will direct that 
question to Mr. King.
    Mr. King. Thank you, Representative. We went into Kentucky, 
as you know, many years ago through multiple mergers, and we 
have expanded since that time.
    We love Kentucky. It is a fantastic State. The people there 
are great, hardworking, honorable people. We as a company love, 
frankly, all of the rural areas in our country.
    Mr. Barr. Could I just interrupt there and go back to the 
technology piece of this.
    How will this merger help a rural State like Kentucky with 
those traditional Main Street values that both of your 
institutions represent in terms of providing credit to rural 
small businesses and farms? And what does technology add to 
that?
    Mr. King. Representative, this is something that we are 
really spending a lot of time focusing on right now, because we 
want to find better ways to meet the needs of these rural 
communities.
    The only way our companies will be successful is if our 
clients and our communities are successful and grow. So, we 
share that concern with you.
    One of the ways, for example, is to provide more digital 
capabilities to these areas. The people in these areas need and 
want digital capabilities, but in many cases, for example, they 
just don't have the broadband capacity.
    So, one of the things we are considering as a strategy is 
how can we get in and be supportive with the local communities 
in providing more broadband capacity.
    Mr. Barr. I look forward to working with Truist on that. 
And I appreciate the answer.
    Mr. Rogers, we have heard about how increased regulatory 
compliance costs have created incentives to consolidate.
    Please describe, with a little bit more specificity than 
you have already, how the newly formed institution will be 
better able to manage those regulatory costs?
    Mr. Rogers. Thank you, Representative.
    As we said in our opening statements, compliance will be a 
cornerstone of what we do at Truist. So what this affords us to 
do is use things like machine learning, use things like 
artificial intelligence, use techniques and technology that 
will give us the opportunity to do our job of compliance even 
better and to make sure that consumers are protected and to 
make sure that we are complying with the rules and regulations 
that apply to our business.
    Mr. Barr. Mr. King, the Basel Committee on Banking 
Supervision has published a methodology for defining a global 
systematically important bank (G-SIB). As you know, that relies 
on five basic indicators: size; intraconnectedness; the lack of 
readily available substitutes or financial institution 
infrastructure; and their global cross-jurisdictional activity 
and their complexity.
    How is the newly formed bank different from a G-SIB?
    Mr. King. Representative, we are much, much, much less 
complex and risky than those organizations. On that scoring 
matrix that you described, which is actually very good and is 
promulgated by the Federal Reserve, each company scores about 
15 or 16, and the largest institutions score well over 400.
    Mr. Barr. You will obviously not be within the definition 
of a G-SIB even after this merger; is that correct?
    Mr. King. That is correct, sir.
    Mr. Barr. And a final question to Mr. Rogers. In your 
testimony, you said bigger does not necessarily mean riskier. 
And you made the argument that the merger would actually 
increase competition by creating a stronger regional bank that 
reduces concentration of systemic risk at the top of the 
market.
    Can you elaborate on how this merger will pose greater 
competition to those G-SIBs, especially if you will remain 
different?
    Mr. Rogers. I think it will enable us to compete with them 
in the areas that we are the same in the communities that serve 
and compete with them on the investments in technology and the 
ability to serve consumers.
    Mr. Barr. Thank you. I yield back.
    Mr. Lawson. Thank you.
    The Chair now recognizes the gentlewoman from North 
Carolina, Ms. Adams.
    Ms. Adams. Thank you very much, Mr. Chairman. And thank you 
for convening the hearing today.
    And thank you, Mr. King and Mr. Rogers, for joining us.
    Mr. King and Mr. Rogers, thank you for your recognition and 
your kind words about the Historically Black Colleges and 
Universities (HBCU) partnership challenge. And of course, we 
have had a number of conversations with both you and members of 
your respective teams, and I am glad that Truist intends to 
follow its predecessors, BB&T and SunTrust--SunTrust is my bank 
right now--in taking the partnership challenge and making a 
public commitment to increase engagements with and investments 
in Historically Black Colleges and Universities.
    The public pledge aspect of the challenge, though, is only 
part of the battle.
    What would Truist's strategy for HBCU investment and 
engagement be? And could you just focus on your long-term and 
sustainable strategies rather than a one-off program?
    Mr. King, you can respond to that.
    Mr. King. Thank you, Representative, and thank you for your 
leadership in this challenge, which we believe is very helpful 
for everyone involved.
    We believe by working with the HBCUs and by strengthening 
their leadership capabilities, working with their students and 
their overall campuses, and in terms of investments, just like 
we did recently in North Carolina in terms of providing sports 
facilities, we think we can make the entire experience at these 
colleges and universities more effective.
    Beyond that, we want to work very closely with these 
universities in providing jobs for their students. The best 
thing we can do is to provide curriculum support and guidance 
so that when these young folks come out, we can help provide 
them really good jobs, so they can go on to meet their goals in 
life.
    Ms. Adams. So this will not be a one-time strategy; this 
will be ongoing?
    Mr. King. This will be ongoing, Representative.
    Ms. Adams. Okay. Mr. Rogers, did you want to make a quick 
comment?
    Mr. Rogers. Absolutely. The HBCUs are critical and 
important parts of the communities that we serve. One of the 
things that we do today is create a financial wellness, to help 
students not only graduate, but graduate with some lessons in 
financial wellness to be better able to manage their budgets 
and be better able to manage their own financial confidence. 
So, that is one of the ongoing things we do.
    And then, Mr. King has volunteered to sponsor something at 
the Leadership Institute of BB&T, which I think will be quite 
effective for the leaders of HBCUs.
    Ms. Adams. Okay. Let me ask you both some yes-or-no 
questions.
    If and when Truist begins its operations, will there be an 
HBCU graduate in your C-suite? Yes or no?
    Mr. King. Representative, we do have a person of color in 
our C-suite, and he has great involvement with HBCUs and has 
for a number of years.
    Ms. Adams. So he will be in the C-suite? That is a yes?
    Mr. King. Yes.
    Ms. Adams. Okay. Mr. Rogers?
    Mr. Rogers. Mr. King spoke for us.
    Ms. Adams. Okay. Great. Are there HBCU graduates right now 
in your organizations who are on track to become members of the 
C-suite?
    Mr. King. Representative, I would say absolutely yes.
    Ms. Adams. Okay.
    Mr. King. Now we need to do more, to be fair, in terms of 
providing training and support, and we are now working on some 
programs to provide more support. For example--
    Ms. Adams. Okay. Good enough.
    Let me just move on and ask about the collection of data.
    Do you collect the demographic data on prospective new 
hires and your overall workforce? Are you doing that or will 
you be doing that?
    Mr. King. Representative, we do and we will.
    Ms. Adams. Okay.
    Once merged as Truist--and I am still trying to get used to 
that name, by the way--will you commit to including in your 
data collection whether a hire is--a long-term employee is an 
HBCU graduate? Will you have that information? Will you know 
it? Are you going to seek it?
    Mr. King. Representative, I am not sure if we include that 
now. But that is a great idea, and I will commit to you that we 
will do that.
    Ms. Adams. Okay. Let me ask you one other thing. Because we 
have some real issues in Charlotte, where you are going to be 
based--I am still concerned about what your merger will mean to 
our communities there.
    So, can I get a commitment that you and Truist will 
dedicate efforts and resources to securing affordable housing 
for long-term residents? We have a serious problem with 
housing. And if we can get a commitment past 2022?
    Mr. King. Representative, as you know, I have lived in 
Charlotte twice and now will be moving there again soon.
    And we recently made substantial commitments, each one of 
our organizations, to affordable housing in Charlotte.
    And I would expect--
    Mr. Lawson. The gentlelady's time has expired.
    Ms. Adams. Thank you, Mr. Chairman. I yield back.
    Thank you very much, gentlemen.
    Mr. Lawson. I now recognize the gentleman, the great 
athlete from Texas, Mr. Williams.
    Mr. Williams. Thank you, Mr. Chairman. I appreciate that 
introduction.
    First, in full disclosure, as you probably know, I am a car 
dealer from Texas. Second, I also played for the Atlanta Braves 
organization. So I do need to know, along with Congressman 
Scott, what the name of that stadium is going to be. And third, 
I am grateful for the banking system.
    That being said, contrary to what some of my colleagues 
seem to be implying, your two banks are currently being 
carefully examined by multiple Federal agencies. The Federal 
Reserve and the FDIC are making sure that this new entity will 
be safe and sound from a regulatory standpoint.
    The Department of Justice is doing an analysis to ensure 
that there will still be adequate competition and a healthy 
financial marketplace for consumers.
    And as both of you have said, you have held the last two 
statutorily required public hearings to ensure the communities 
that you will be serving are aware of this potential change.
    So if my colleagues have complaints about the process of 
two banks merging, then I would encourage them to change the 
underlying law rather than publicly criticize your two banks 
who have been doing everything by the book.
    On a side note, I just want to say this about minimum wage: 
Minimum wage is not a career, and we need to remember that.
    Before we get started here, I want to ask each of you a 
question, starting with you, Mr. Rogers: Are you a socialist or 
a capitalist?
    Mr. Rogers. Representative, I am a capitalist.
    Mr. Williams. Thank you.
    Mr. King, are you a socialist or a capitalist?
    Mr. King. I am a capitalist.
    Mr. Williams. Thank you for that answer.
    Now, we have heard all of this concern about creating a new 
megabank if this pending merger is completed. But if I look at 
the business models of your two banks, compared to some of the 
G-SIBs in the country, they seem to be quite different, and we 
talked about that today. I don't see either of your banks 
heavily engaged in some of the riskier derivative plays of the 
bigger Wall Street banks, and you have talked about that.
    My question to you, Mr. Rogers is, what do you want the 
identity of this new bank to be?
    Mr. Rogers. Representative, thank you for that question. We 
want the identity of that bank to be very similar to the great 
histories and identities of our existing banks, to be a great 
Main Street bank which can be a full-service bank.
    As I said in my opening statement, I started with in an 
entry-level position and spent 39 years at the same company, 
and that company was always built on, if you build your 
community, you build your bank. We are only going to be as 
successful as our communities are successful.
    We want to make sure that our bank is represented as 
someone who is a steward and a partner with the communities 
that we serve.
    Mr. Williams. Okay. And to add to that, once you get to 
that position, are you looking to compete directly with the 
biggest, most complex financial institutions in the world in 
the future?
    Mr. Rogers. Representative, we are only looking to compete 
in the markets where we compete. We are not looking to follow 
them internationally. We are not looking to follow them into 
esoteric products.
    But the places where we do compete, the places where we 
compete on Main Street, we want to be extraordinarily 
competitive with them.
    Mr. Williams. Okay. On July 10th, the North Carolina 
banking commissioner approved the merger of your two banks. 
Their office released a statement that 95 percent of the 
comments they received during the review process were positive.
    And I look at that and I think, if any of us members on 
this committee had a 95 percent satisfactory rate in our 
districts, we wouldn't have much to worry about.
    So, Mr. Rogers, how do you plan on building upon that 
success and continuing to work with customers to avoid 
confusion in the areas where branches may be consolidated, as 
we talked a little bit about today?
    Mr. Rogers. Even with the 95 percent positive, we want 100 
percent. So of the 5 percent, we have reached out to all of 
them, individually and collectively, to try to address their 
concerns, to make sure that we are responding to every need 
from everyone in our communities.
    Our focus will be on communities. Our focus will not be to 
abandon communities. We have committed to keep branches in 
rural markets. We have committed to open branches in LMI 
markets, because we will only be as strong as our communities.
    Mr. Williams. Okay. Mr. King, on page 2 of your testimony, 
you pledge to invest around $100 million annually into 
innovation and technology, to create a digital client 
experience that is second to none.
    Can you briefly elaborate on some of these planned 
investments and the benefits that they could have for small 
businesses like mine back in Texas looking to secure loans?
    Mr. King. Representative, there are a number of areas, 
starting with enhancing our cybersecurity risk mitigation 
programs, which are already good, but need to be increasing 
every day because the risk is increasing every day. We want to 
keep you and us safe.
    We want to provide you with the best level of client 
service quality every day so that when you are dealing with 
your clients trying to sell cars, we can be there as your 
partner, we can provide you real-time immediate support so that 
we are not the problem in terms of you being able to sell that 
next car.
    In order to do that, we are already working on a plan to 
provide more all-in or total, if you will--
    Mr. Lawson. The gentleman's time has expired.
    Mr. Williams. I appreciate you being here. Thank you.
    I yield back.
    Mr. Lawson. Thank you.
    The gentleman from Illinois, Mr. Garcia, is recognized for 
5 minutes.
    Mr. Garcia of Illinois. Thank you, Mr. Chairman.
    I would like to thank the two witnesses here today. I would 
like to dive a little deeper on the significance of this 
proposed merger and future implications.
    The Federal Reserve approved 95 percent of bank merger 
applications last year, its highest approval rate since it 
began keeping track in 2011.
    While a small number of applications have been withdrawn, 
the Federal Reserve has not rejected a bank merger application 
since 2003. It has been suggested that one reason for this high 
approval rating is the Fed's use of a preapproval process 
wherein the Fed works out issues with banks in advance of a 
merger announcement.
    In an American Banker op-ed published in April, a former 
Fed attorney wrote, ``It was common for a bank or its law firm 
to have private conversations with Fed representatives to 
informally vet a proposal before signing a merger agreement. If 
Fed representatives raised concerns about a proposal, the bank 
might not pursue the deal. But when Fed representatives 
expressed no reservations, the bank could enter a merger 
agreement with the Fed's implicit blessing.''
    Mr. King, did you or anyone on your staff meet with 
regulators before signing the merger agreement or filing the 
merger application?
    Mr. King. Thank you, Representative.
    I did have conversations, phone conversations, with 
regulators as we are required to, because when we are doing 
anything that is strategic and significant in our company, 
whether it is related to mergers or not, we are required to 
consult with our regulators.
    Mr. Garcia of Illinois. So you did.
    Mr. Rogers?
    Mr. Rogers. Representative, we informed the Federal Reserve 
that we were undertaking a merger.
    Mr. Garcia of Illinois. Did you meet with them?
    Mr. Rogers. We had a conversation with the Federal Reserve. 
We are always meeting with our regulators at any particular 
time.
    Mr. Garcia of Illinois. So you did.
    Mr. Rogers. But we informed them we were entertaining a 
merger versus seeking an opinion on approval.
    Mr. Garcia of Illinois. Thank you. If so, if you did, and 
you just answered the question, did you ask for assurances that 
the merger would be approved?
    Mr. King. Representative, we did not ask for any assurances 
that it would be approved, nor did they give us any.
    Mr. Garcia of Illinois. Okay. Did the regulators provide 
assurances that there would be no barriers to approval?
    Mr. King. Representative, we are a little bit limited in 
terms of what we can say in terms of conversations that we had 
with our regulators.
    Mr. Garcia of Illinois. So you can't answer that?
    Mr. King. But I can assure you that the process that we are 
going through is extraordinarily rigorous.
    Mr. Garcia of Illinois. Okay. I get that.
    I want to ask about one potential barrier to approval, the 
Community Reinvestment Act (CRA).
    The Federal Reserve and the FDIC must specifically 
consider, ``the record of performance under the Community 
Reinvestment Act,'' when reviewing the merger.
    In 2008, the FDIC downgraded BB&T's CRA rating from 
outstanding to satisfactory due to violations of the 
antidiscrimination provisions of the fair lending laws and 
regulations.
    What assurances have you provided your regulators that 
BB&T's record will not spread to SunTrust, and how can we be 
sure that the $1.6 billion in operating expense reductions 
projected from this merger won't impair Truist's ability to 
comply with the CRA?
    Mr. King. Thank you, Representative. Our current CRA rating 
is outstanding, as it has been for almost my entire career. 
That particular situation was a short-term situation where 
there was an area we needed to correct with regard to auto 
lending, and that has been corrected and is being given very 
good ratings from the regulators.
    With regard to cost reductions going forward, I can assure 
you that we will not be sparing any dollars necessary to 
provide the utmost level of Community Reinvestment Act support 
and overall support of our communities.
    Mr. Garcia of Illinois. Has your most recent rating on 
CRA--were there any problems identified?
    Mr. King. There were no major problems identified.
    Mr. Garcia of Illinois. No major ones. Any minor ones?
    Mr. King. Representative, in any examination, there are 
always minor ones.
    Mr. Garcia of Illinois. Okay. The lenient attitude of 
regulators toward mergers has led to a concentration in your 
industry. When markets are concentrated, consumers and small 
businesses suffer from higher interest rates and less favorable 
financing terms.
    After S.2155 passed, an analyst for Wells Fargo told CNBC, 
``We absolutely expect bank consolidation to accelerate.''
    The BB&T and SunTrust merger is the most high-profile and 
biggest example of a merger. If this merger were approved, can 
we expect it to set a trend in your industry, in other words, 
usher in many more?
    Mr. King. Representative, the S.2155 change that you are 
referring to had absolutely nothing to do with our decision to 
merge. It was based on many other--
    Mr. Lawson. The gentleman's time has expired.
    Mr. Garcia of Illinois. But will this usher in more 
mergers--
    Mr. Lawson. The gentleman's time has expired.
    Mr. Garcia of Illinois. Thank you, Mr. Chairman.
    Mr. Lawson. I now recognize the gentleman from Arkansas, 
Mr. Hill, for 5 minutes.
    Mr. Hill. Thank you, Mr. Lawson. Thanks for sitting in the 
chair today. You look good up there.
    Mr. King, Mr. Rogers, thanks for coming today. I was in and 
out of the discussions today.
    You filed your application with the Fed for a merger, is 
that correct?
    Mr. King. Representative, that is correct.
    Mr. Hill. And the State of North Carolina has approved the 
merger?
    Mr. King. Representative, that is correct.
    Mr. Hill. Are there any other States that have to approve 
the merger?
    Mr. King. There are a couple of other States that have to 
opine on the merger, yes, sir.
    Mr. Hill. And in response to my friend from Illinois' 
question, you both have a satisfactory CRA rating, is that 
correct?
    Mr. King. Representative, that is correct.
    Mr. Hill. The responsibility of the Fed is to evaluate the 
impact on all of your communities and do that in a very careful 
way. CRA is a big part of that. Have you been given the list of 
assets that you have to divest in this merger?
    Mr. King. Representative, we are working with all of the 
various regulatory bodies. And that process primarily 
originates with the Department of Justice. And we are in the 
process of having confidential discussions with the Department 
of Justice and the other regulators with regard to any types of 
divestitures that may be required.
    Mr. Hill. Because one thing we talk a lot about in this 
committee is the impact on--consolidation industry on the rural 
counties. There are 33 counties in the country now that have no 
physical bank presence at all, and 2 of those are in Georgia, 
in Quitman and Stewart Counties. So, that is always of interest 
here.
    But we also have 122 counties in the country that have only 
one bank office and 163 counties that have two. And this is 
something that I have seen over the course of my career where 
the Fed is, I think, too narrow in the definition in the 
Herfindahl Index in what is competition by using the deposits 
only and not taking into account all of the other ways that 
people have access to credit and access to deposits.
    And they are also too narrow, I think, in this divestiture 
they might be considering in a rural county where it can only 
be sold to another commercial bank, for example. I really think 
if you are in a rural county, you have zero bank locations or 
potentially zero, or one or two, that offering opportunity for 
other financial institutions to buy those branch locations 
would be better.
    Do you have any plans to ensure that there aren't 
additional counties in Georgia that would go bankless by virtue 
of the merger?
    Mr. Rogers. Representative, our combined company will 
represent more rural counties than any of the largest banks 
combined. So we have a fundamental belief and approach to rural 
counties.
    As you identified, deposits and branches aren't the only 
ways to serve rural counties. And we are committed to serving 
all of the customers who are in our geographies.
    Mr. Hill. Thank you. I hope that the Fed will broaden the 
definition of how they look at bank concentration in the 
Department of Justice and really get away from the Herfindahl 
Index, which I think is outdated.
    My friends on the other side of the aisle have talked about 
bank concentration and their concerns about that. And, of 
course, that is a longstanding, over 200-year concern of all 
Americans about concentration of assets in our banking system.
    But I would again argue that the fault of that is our Bank 
Holding Company Act, that we don't allow more variety of people 
to buy banks that get in trouble, and therefore, when you look 
at the majority's chart up there and you see failing banks, 
they are only allowed to be sold to what? Larger banks. It is 
our Federal policy, I think, that drives bank concentration, in 
addition to the overregulation that has been talked about 
today.
    Let me ask each of you, Mr. King and Mr. Rogers, are you 
involved in fintech partnerships? Have you gotten an emerging 
company that you have partnered with in the fintech world? Mr. 
King?
    Mr. King. Representative, we do have a partnership and are 
considering others.
    Mr. Hill. What is the nature of the one that you have now?
    Mr. King. It is actually a very interesting company, 
Representative, that helps banks and other organizations with 
risk management processes, particularly in the AML area.
    Mr. Hill. Thank you.
    Mr. Rogers?
    Mr. Rogers. Representative, we do have partnerships with a 
variety of different fintech companies ranging from areas that 
are focused on consumers, related to areas that are focused on 
technology, all different areas that we think will enhance our 
ability to serve consumers in the future.
    Mr. Hill. Good. I thank the Chair, and I yield back the 
balance of my time.
    Mr. Lawson. Thank you.
    Now, the Chair recognizes the gentleman from Missouri, Mr. 
Cleaver, who is also the Chair of our Subcommittee on National 
Security, International Development, and Monetary Policy. You 
are recognized for 5 minutes.
    Mr. Cleaver. Thank you, Mr. Chairman.
    Mr. King, Mr. Rogers, thank you for being here today.
    Let me begin by paying a compliment to you. I thought it 
was revealing and significant that your two companies did, in 
fact, furnish diversity and inclusion data to the regulator. I 
have been on this committee for 15 years in January, and this 
is the first time I have seen anything like that. So, let me 
compliment you. That is rare, and I hope other companies will 
take a page out of your book in doing that. So it would at 
least suggest that there is great interest in trying to 
maintain a workforce that is diverse and looks like and 
represents the country.
    And I have the numbers that you presented: 20 percent 
women, 30 percent people of color. And on the board as well and 
27 percent people of color.
    One of the problems we have in many of the corporations, 
including financial institutions, is that the ranks of the 
middle level are, in fact, very diverse. But the problem that, 
as time moves on, they don't move up.
    And I am wondering, is there something that needs to be 
done or maybe even that you guys could do, since you seem to be 
a little more advanced than most of these financial 
institutions, where a pipeline is developed so that women and 
minorities don't stay at that middle level which makes the 
diversity numbers look good but they never go up?
    Mr. Rogers. Representative, I think you are correct in that 
that is one of the challenges that corporate America has about 
diversity at the C-suite level.
    We took the opportunity, as you recognized, to put 
diversity and inclusion in our application, which is not 
required, to signify how important it was.
    But most importantly, in the thousand or so people that we 
have chosen to move into the executive positions in our 
company, we realized we were at a seminal moment for Truist, 
and exactly what you described as we had an opportunity.
    And although we wish we had made more progress, our 
collective executive team is 25 percent more diverse than it 
would have been if we had just added the two companies 
together. So we did want to make sure that we took that 
opportunity at this juncture.
    Mr. Cleaver. Are you familiar with the NFL Rooney Rule?
    Mr. King. Representative, yes.
    Mr. Rogers. We are.
    Mr. Cleaver. You too as well, Mr. King?
    Do you think that works in corporate America?
    Mr. King. Representative, I think Mr. Rooney was a 
brilliant person, although I have never met him. I think it was 
a very good way to provide some discipline for the NFL and it 
certainly applies to any other business.
    In our business, we applied the Rooney Rule, and we have 
expanded it to include women as well so that when we are making 
selections at our mid- to higher-level jobs, we imposed an 
expanded Rooney Rule to make sure that we are getting diverse 
candidates who have a fair chance before the final decision is 
made.
    Mr. Cleaver. I am going to yield back my time. Because 
normally I would--you know, you need to fuss a little bit when 
you are sitting up here. You have to fuss just a little, 
because it is almost required in Congress.
    But I am going to yield back, because I am impressed with 
what you are doing.
    I yield back, Mr. Chairman.
    Mr. Lawson. Thank you.
    And now, I recognize the gentleman from North Carolina, the 
ranking member, Mr. McHenry, for 5 minutes.
    Mr. McHenry. I guess we will leave the rancor down the 
hall, and we have a bit of comity here, which is welcome.
    This hearing is fairly unprecedented. The last time this 
committee had a hearing that was similar to this, it was the 
merger of Travelers and Citi. And by the way, both of those 
institutions were larger than your merged institution, and that 
was 20 years ago, so not even adjusted for inflation. So, we 
are in a significantly different place.
    I just want to ask you, FDIC Chair McWilliams indicated 
that the entire FDIC Board would vote on your merger. Is that 
your understanding?
    Mr. King. Representative, it is.
    Mr. Rogers. Representative, that is what I understood as 
well.
    Mr. McHenry. It seems to be a fairly proactive step. Her 
predecessor delegated that authority and didn't require a Board 
vote.
    Is that your understanding as well?
    Mr. King. Representative, that has happened before.
    Mr. McHenry. Okay. But you chose the FDIC as your regulator 
to merge this institution for the review. Why? Why did you 
choose the FDIC?
    Mr. King. Representative, BB&T is the acquiring company, 
and the FDIC has been our primary regulator for as long as I 
have been with the company.
    First of all, it is not appropriate to be trying to change 
regulators in the midst of significant combination.
    And second, we have had very good regulatory scrutiny and 
oversight from the FDIC. And our boards combined believe that 
it would be an appropriate form of regulation for our company, 
and frankly I believe that is what the regulators would prefer.
    Mr. McHenry. In that process, how many pages of information 
have you filed?
    Mr. King. I'm sorry. Could you say that again?
    Mr. McHenry. How many pages of information have you filed 
with the FDIC?
    Mr. King. I would be happy to get with your staff, 
Representative, to give you that number, but it would be well 
into the thousands.
    Mr. McHenry. Okay. Have you had public meetings?
    Mr. King. Representative, we had the 2 public meetings that 
were held by the Federal Reserve and the FDIC, plus we had 6 
listening sessions voluntarily where we had people come in from 
12 States and made presentations.
    Mr. McHenry. How many of those listening sessions were 
mandated under rules or regulations?
    Mr. King. None were mandated.
    Mr. McHenry. Okay. And you have had a lot of conversations 
and tried to have a transparent process. A lot has been touched 
on in terms of the questions on regulation.
    Your merged institutions will have significant cost savings 
by merging your regulatory and compliance departments, for 
sure, but you also both highlight the need for technology 
investment.
    According to Pew Research, in 2011, 35 percent of Americans 
had a smartphone. Today, it is 81 percent. How does that change 
the banking landscape for your institution?
    Mr. King. Well, Representative, on both sides--and Mr. 
Rogers can speak to this as well--it has changed it 
dramatically. For example, in our company today, on any given 
day, we have 1.8 million touches with our clients digitally and 
about 87,000 in the branches.
    Mr. McHenry. Say that again?
    Mr. King. 1.8 million touches digitally or online with our 
clients each day and 87,000 in the branches.
    Mr. McHenry. Okay. So the branch network is not what it 
used to be?
    Mr. King. That is correct.
    Mr. McHenry. Okay. Because your customers are driving that 
change. What kind of investment is necessary to compete in that 
marketplace and to give your customers what they demand?
    Mr. King. Representative, it requires a huge investment, 
because we have to have not only the platforms to be able to 
interface with those clients, but they have to be changed 
almost daily.
    And the reason is because consumer preferences are changing 
literally as we speak. It is what I call real-time 
satisfaction. Clients today demand to have what they want, when 
they want it, exactly where they want it. And it is happening 
in all industries, not just banking.
    Even in the past, when I first started, if you had a good 
friendly branch system, you didn't need any kind of technology 
for the client.
    Today, if you don't have the latest and greatest 
technology, you are simply not in the consideration set in 
terms of which institution they will pick.
    Mr. McHenry. So, regardless of this merger taking place, 
your branch network in the next decade looks dramatically 
different than it did over the last decade; is that fair to 
say?
    Mr. King. Representative, I believe that is very fair.
    Mr. McHenry. Okay. Thank you. I yield back.
    Mr. Lawson. Thank you.
    I now recognize myself for 5 minutes.
    Mr. King, Mr. Rogers, again, I would like to welcome you to 
the committee and I think I have heard a little bit of it in 
listening to the testimony but I want to make sure I clearly 
understand.
    As we look at the global market, what impact would the 
merger have on the global economy? Specifically, what benefits 
and challenges would this merger have on the global market?
    Mr. Rogers. Representative, in fairness, I think this 
merger has a lot of impact on local communities. I think that 
is where the big impact is. Our operations aren't global or 
international by nature. So our impact is on local communities. 
Our impact is a Main Street impact.
    Mr. Lawson. Okay. And I thought I had heard and one thing I 
would like to say to you, Mr. Rogers, about SunTrust is, being 
in business over 36 years, I had the opportunity to deal with 
SunTrust on many occasions, and that relationship was always 
great. You even had the mortgage on my house, but I have always 
been really impressed with the way you handle the consumer, 
which brings me to this question.
    A question was asked by one of my colleagues here about 
what is the relationship going to be with the underserved? I 
understand--and you commented on it again--that that is one of 
the relationships that you all, both you and Mr. King, have 
observed and talked about as this merger comes together.
    Could you elaborate, Mr. King, on that again, about how 
does a larger institution go about looking and being in the 
capacity to give a smaller loan to individuals? Because one of 
the things that we thought that this would be a situation that 
exists with credit unions, but oftentimes a lot of the people, 
even though they have expanded, still walk into those 
institutions because they feel close to them, because they are 
all over their communities.
    So, could you elaborate on how will the institution, once 
the merger continues, and the relationship to deal with the 
underserved?
    Mr. King. Representative, that is a very important area 
because so many of our families and individuals in this country 
today have very limited resources, and being able to transact 
business in small amounts is the only way they can live, so we 
need to have products and services that make it not only 
available but easy for them.
    So, we are doing a lot of thinking, a lot of planning, and, 
frankly, having discussions with regulators with regard to how 
we can provide better services, and it is a complex process. It 
is not as simple as you might expect to be able to say, we will 
just do it, because there are rules and regulations in terms of 
what types of loans and deposits and other services that we can 
offer, that we have to comply with every day.
    But the spirit of it is important, and that is that we want 
to try. We want to try to open up the banking system to more 
people who are underserved and who deserve banking services. We 
believe simply that more individuals and families in this 
country can be better served by having access to the banking 
system.
    Mr. Lawson. Thank you.
    Mr. Rogers, one of the questions that was asked about 
during the downturn in the economy was on what institutions 
were doing, and you all stated that you were doing everything 
you could to save homes.
    There was a situation some years ago when people were 
having problems with the notes on their cars and I was able to 
contact your institution and asked them if they could work with 
these individuals? Could those individuals pay interest only 
until they get back on their feet? And SunTrust was able to 
grant that. Do you still run into situations like that?
    Mr. Rogers. Representative, there are always situations in 
the communities that we serve where people have challenges and 
problems and need some kind of assistance and some kind of 
help; and we want to have products, services, and capabilities 
to accommodate their needs.
    Mr. Lawson. Okay.
    I think that was my last question.
    I am going to move on and recognize Mr. Loudermilk from 
Georgia for 5 minutes.
    Mr. Loudermilk. Thank you, Mr. Chairman.
    And I thank you both for being here. We have had a good 
opportunity to have dialogue since this announcement was made 
back in February, and I appreciate the transparency that we 
have had through both sides of the merger. Quite frankly, it 
took some of us by surprise. As you both know, we have gone to 
bat a lot for small banks, community banks, and regional banks; 
and our first concern and my major concern was what is the 
impact this is going to have on Georgia?
    Being the sole Republican from Georgia on this committee, I 
feel I represent the entirety of the State in financial 
services. I have a good working relationship with my good 
friend also from Georgia, Mr. Scott; and as he said, my first 
concern was over the banking community and the service to the 
constituents and consumers of Georgia.
    As you know, as Mr. Rogers can attest, the banking 
community in Georgia is a very tight-knit community, with a lot 
of good working relationships between the locally owned 
community banks and the larger banks and even some recent 
aspects have brought credit unions into the fold of a good 
working relationship.
    One of the things that I do is not only get the pulse of 
what is happening here but also back in the community, and we 
have had several prominent Democrats also come out and support 
the idea of this merger as being something good for the State 
of Georgia.
    And so, it was a little bit different than what we are 
hearing here today; and, in fact, as I am sitting in the 
committee, I often not just listen to the testimony from you 
but also questions that I am getting from both sides of the 
aisle to try to get a sense of the pulse of what is going on 
here.
    I think it is interesting that there has been a lot of 
criticism of big business coming from some of the folks here 
today and throughout this Congress, some criticisms of what 
they call megabanks; but they don't seem to mind mega-
government, and big government is really what the source of the 
problem is. It even goes back to the founding of this nation. 
Thomas Jefferson wrote in the Declaration of Independence that 
one of their biggest concerns was the growth of government that 
has erected a multitude of new offices and sent swarms of 
officers to harass the people and eat at our substance. It is 
the government that is the major drain on the American economy 
and individuals.
    I also had heard that there is concern over what you would 
do to local community banks and credit unions, and that was one 
of the concerns I had early on. I talked to a lot of our local 
community banks, and ever once did they mention the merger of 
these two banks as a concern. Their number one concern is the 
400 regulations and 2,800 restrictions brought on by Dodd-
Frank. That has done more damage to the banking community in 
Georgia.
    So, I just want to lay that out there that the sense in 
Georgia is this is going to be a positive move. Even though 
there is a loss of a regional bank headquartered there, we 
think we are growing.
    I do have some questions, though. I understand that banking 
operations would continue to be based--some of it would be 
based in Georgia. However, there are about 740 SunTrusts and 
BB&T bank branches within 2 miles of each other. So, my concern 
is the--other concerns are the possible branch closures and job 
losses.
    Mr. Rogers, I know that you are prohibited from making 
decisions on branch consolidation until after the merger is 
approved but can you kind of comment on how Georgia consumer 
employees will fare after all this is settled?
    Mr. Rogers. Representative, thank you.
    As you noted, I have been a proud member of the Georgia 
banking group for a long time. And Georgia will continue to be 
important to Truist.
    I think the question was about--
    Mr. Loudermilk. You have several branches of both banks 
that are close to each other.
    Mr. Rogers. Yes.
    Mr. Loudermilk. I know you cannot go into details. But can 
you comment on what the outcome is going to be?
    Mr. Rogers. Yes. Thank you.
    Mr. Loudermilk. The intention.
    Mr. Rogers. The outcome, the intention--as you noted, we 
can't disclose because we haven't been able to do the work yet 
on which branches in specific would be subject to decisioning, 
but what we have said is that all client-facing teammates--and 
those are teammates and employees who exist in branches--will 
have employment. So, the job loss in those branches we expect 
to be de minimus because we will offer them other opportunities 
in our company in other places.
    As I mentioned, we have natural turnover in that business. 
So, we can say with a great deal of confidence that those 
employees will be offered opportunities. So in the State of 
Georgia, if someone was in a branch and that branch got 
consolidated, they would have an opportunity with the new 
company.
    Mr. Loudermilk. All right. Thank you.
    I am running out of time. I have some other questions that 
I will submit for the record.
    But I also want to comment on one of the big concerns I 
heard, which is what is going to happen to the name of the 
park, especially since we probably will host a World Series 
this year, and I appreciate my colleague on the other side 
strongly advocating for a Loudermilk-Scott name possibly for 
it.
    With that, I yield back.
    Mr. Lawson. Thank you.
    The Chair now recognizes the gentlewoman from Michigan, Ms. 
Tlaib.
    Ms. Tlaib. Thank you so much, Mr. Chairman.
    Thank you both for being here. I want to talk about mega-
discrimination. Folks are using these various words but it is 
really people at home in my district who are directly impacted 
by some of the practices by banks, small and large, but it is 
the human impact. We lost more Black home ownership in Michigan 
than any other State.
    We have seen more of kinds of practices that are happening 
on the ground that are preventing the majority of folks in my 
district who are lower-income, moderate-income families who 
have decent-paying jobs but for the fact that we have various 
systems in place, I think, that lack accountability.
    And so both of you know, I have the lawsuits here and some 
of the settlement agreements in regard to some of the 
practices.
    From 2005 to 2009, Mr. Rogers, SunTrust Mortgage violated 
both the Fair Housing Act and the Equal Credit Opportunity Act 
by charging more than 20,000 African-American and Latino 
borrowers higher fees and interest rates than non-Latino and 
white borrowers, resulting in thousands of families, Brown and 
Black families, paying more for their loans.
    Could you describe SunTrust's effort to repair, to address 
the scheme of the discriminatory practices within the lending 
process right now? Because then I want to ask you about the 
merger.
    Mr. Rogers. Representative thank you. No consumer, 
regardless of race or gender, should ever be discriminated 
against.
    Ms. Tlaib. I agree.
    Mr. Rogers. And so, we agree on that.
    In that specific case, we didn't have agreement on whether 
we discriminate or not but we did have agreement that our 
policies could be better, so we have put forth policies at 
SunTrust that check on a weekly, daily, and monthly basis to 
ensure that we don't have policies and practices in place that 
discriminate against anyone. We look at our compensation 
practices and those are monitored very effectively at our 
company, and our low- to moderate-income lending has increased 
substantially since then.
    Ms. Tlaib. Yes, and there was a $21 million settlement. I 
think folks need to know that. That sounds like something was 
wrong.
    Can you describe the current state of SunTrust Mortgage's 
monitoring efforts for discriminatory lending and if these 
restrictions on loan offices and mortgage brokers have been 
reduced?
    Mr. Rogers. They have been. We have a monthly process where 
we look at virtually every loan that we have made to ensure 
that we don't have a discriminatory practice from a pricing 
standpoint. We have eliminated any of that in our compensation 
practices and we continuously monitor for that to ensure that 
we don't have any defects along with that process, because this 
is critically important to us. That was a chapter that we are 
not proud of in our company and one that we do not intend to 
repeat.
    Ms. Tlaib. Finally, what assurances can you provide the 
public and for us in this committee that the merger, the merged 
bank, will not engage in the same discriminatory lending as its 
predecessor? Do the settlement requirements go along with the 
merger, or do you all get to wipe that clean and start all over 
again?
    Mr. Rogers. Representative, we will never wipe 
discrimination clean.
    Ms. Tlaib. I am glad you answered it that way.
    Mr. Rogers. The policies that we have in place will be key 
going forward.
    Ms. Tlaib. Mr. King, will the merged bank participate, if 
it is in approved, in the Federal Housing Authority's 
Endorsement Program?
    Mr. King. What's that program again? I'm sorry.
    Ms. Tlaib. If the merger is approved, the bank, both of 
your banks merging--I think you call it Truist--will you be 
participating in the Federal Housing Authority Endorsement 
Lender Program?
    Mr. King. Representative, we will.
    Ms. Tlaib. And does the merged bank plan on adhering to the 
False Claims Act?
    Mr. King. Absolutely.
    Ms. Tlaib. Between January 1, 2016, and September 30, 2014, 
your bank, Mr. King, endorsed FHA insurance for mortgage loans 
that did not meet the HUD underwriting requirements and did not 
adhere to FHA's quality control requirements--to continue to 
have loans backed by FHA, your bank lied to continue to 
participate in FHA's Direct Endorsement Program.
    So, Mr. King, could you describe how your bank has 
addressed this issue and the effectiveness of the changes 
implemented?
    Mr. King. Thank you, Representative.
    We did, like most institutions, have challenges with regard 
to our processes to meet the utmost standards.
    Ms. Tlaib. I know, Mr. King, but calling it challenges and 
not lies does not mean you are going to address the problem and 
I know I don't have enough time. We can talk offline but--
    Mr. Lawson. The gentlelady's time has expired.
    Ms. Tlaib. --please don't call it challenges. It was lies. 
You misled them.
    Mr. Lawson. The time has expired.
    The Chair now recognizes the gentleman from North Carolina, 
Mr. Budd.
    Mr. Budd. I thank the Chair.
    As a Winston-Salem native, I know that BB&T's contributions 
to our local economy and charitable causes have helped a lot in 
a lot of parts of our State. So, the name means a lot to our 
community; and I am happy to have you here, Mr. King, along 
with you, Mr. Rogers.
    Look, we all know that this is a political hearing. Both of 
your banks are strong. Both of your banks are following a 
detailed merger process. And the North Carolina Commissioner of 
Banks, Ray Grace, approved this about 2 weeks ago, on July 
10th.
    That being said, I have a couple of questions. I want to 
start with you, Mr. King. Can you tell this committee more 
about your experience back, this is maybe a decade or two ago, 
when you were in Wilson, North Carolina? You moved to Winston-
Salem, so a bigger community, leaving a smaller community. And 
how did Wilson fare after you moved to Winston-Salem?
    Mr. King. Thank you, Representative.
    I think that is a very insightful and fair question because 
that was a merger of equals as well.
    Our company, BB&T, merged in a merger of equals with 
Southern National Company and as a part of the transaction, we 
did move our headquarters out of Wilson, a town of about 30,000 
people. There was great concern at that time in the community 
that the loss of jobs would be catastrophic.
    We told the community at that time that we were merging to 
go forward to grow and prosper and that we thought that it 
would be good for the community and, in fact, at the time we 
did the merger in 1995, we had about 1,000 employees in Wilson, 
and today, we have over 2,000 employees there. The community 
has continued to thrive. We are, in fact, building a brand new 
state-of-the-art headquarters there today as we speak.
    And so, it has turned out to be very good for Wilson. It 
has turned out to be good for Winston-Salem, just as I believe 
the Truist combination will be good for Atlanta, good for 
Winston-Salem, and good for Charlotte.
    Mr. Budd. Thank you.
    So, following up--and this is a bit the inverse of my 
colleague, Mr. Hill from Arkansas, his questions, which were 
about rural communities. My question is, what role do you see 
rural communities playing in the future of your business? I 
want to see how you are engaged there. And how does Truist plan 
to stay involved in small-town America?
    Mr. King. We believe very strongly, Representative, in 
supporting rural America. Rural America is at the roots, if you 
will, of our great country. We grew up as a farm bank, and for 
almost my entire career we have served almost predominantly 
rural areas. We will continue to be deeply committed to rural 
areas.
    We have expressed that through our actions. Over the years, 
we have acquired major institutions in West Virginia and in 
Kentucky. We have expanded in our old markets in North Carolina 
and South Carolina. We are active in southern Georgia. We like, 
to be honest, small markets as well, or better, than large 
markets. They are all really important.
    I can say to you that I firmly believe our commitment to 
small, rural America will be no less than it has been in the 
past and will almost certainly be greater because we will have 
more capacity to make more investments in those communities.
    For example, we recently made a $5 million-commitment to 
West Virginia to help fight the opioid crisis. Recently, we 
committed $5 million in eastern North Carolina to help build 
and restore housing that was wiped out by floods. We are 
building headquarters, as I mentioned, in Wilson but also in 
Whiteville. We are doing things in small communities today that 
we simply don't have to do by any regulation or any mandate. We 
are doing it because it is the right thing to do.
    Mr. Budd. Yes, every time you have mentioned a different 
area, I can put faces and names with those stories. So, thank 
you so much for what you are doing there.
    Mr. Rogers, continuing on, how do you think rural and 
smaller communities will fare as technology advances the 
business of banking? Things are changing. How can you make sure 
that the rural and these smaller communities don't get left 
behind when it comes to technology?
    Mr. Rogers. I think that will be critical, and that is one 
of the key reasons for this merger is to afford the opportunity 
to reach out to all of our communities. The rural communities 
will be a big part of that. If you think today as sort of what 
a tractor looks like and think about all the technology that 
exists on that, that is the same with financial services is 
those rural communities want the same type of benefits and the 
same type of opportunities. They want to deal with financial 
services just like they deal with everything else that is part 
of their infrastructure.
    And I think this is going to afford us the opportunity. I 
think we will really be the bank that will be recognized for 
physically and digitally and humanly serving rural markets.
    Mr. Budd. Very good.
    I think my time has nearly expired.
    Mr. Chairman, I yield back.
    Mr. Lawson. Thank you.
    The Chair now recognizes the gentlelady from New York, Ms. 
Ocasio-Cortez.
    Ms. Ocasio-Cortez. Thank you, Mr. Chairman.
    Mr. King and Mr. Rogers, as you understand it, this is the 
largest bank merger since the 2008 financial crisis, correct?
    Mr. King. Correct.
    Mr. Rogers. Representative, I believe that is correct.
    Ms. Ocasio-Cortez. Okay. As a part of the settlement with 
the government, Mr. King, BB&T admitted that between January 1, 
2006, and September 30, 2014, ``it certified for FHA insurance 
mortgage loans that did not meet the HUD underwriting 
requirements,'' meaning that it sold the public junk mortgages 
and as a result of that settlement, your bank paid $83 million 
to the public. Is that correct?
    Mr. King. Representative, in that experience this was a 
conclusion by the FHA that some of our documentation was not up 
to their standards.
    Ms. Ocasio-Cortez. I see.
    Mr. King. And as a result, they denied the guarantee of the 
loan between the FHA and BB&T. It had nothing to do with the 
client. It was between our company and the FHA.
    Ms. Ocasio-Cortez. Thank you.
    And, Mr. Rogers, in 2014, the CFPB, the DOJ, HUD, and the 
AG in 49 of the 50 States, plus the District of Columbia, 
reached an agreement requiring SunTrust to pay $968 million for 
engaging in, ``systemic mortgage servicing misconduct.'' Is 
that correct?
    Mr. Rogers. Representative, that is correct.
    Ms. Ocasio-Cortez. Okay. And in a statement released by the 
CFPB, SunTrust was found to have engaged in illegal foreclosure 
practices, providing false and misleading information to 
consumers.
    Regardless of intent, these things have happened. They have 
been documented as having happened. And we often rely on 
watchdogs to make sure that the public is being protected; but 
if this merger is approved, the FDIC would be the primary 
regulator for you both, is that correct?
    Mr. King. Representative, that is correct.
    Ms. Ocasio-Cortez. In other words, the FDIC Chair would be 
responsible for overseeing the largest bank for which the FDIC 
has served as a primary regulator.
    Are you aware that only three of the five seats at the FDIC 
are filled?
    Mr. King. Representative, as I understand it, that is 
correct.
    Ms. Ocasio-Cortez. So, the FDIC is supposed to be an 
impartial watchdog, except the only vacancies on the FDIC are 
for Democrats, so currently, the FDIC is only chaired by 
Republicans. Correct?
    Mr. King. Representative, I believe that is correct. That 
is not my specialty.
    Ms. Ocasio-Cortez. Of course.
    So, right now we are dealing with an all-Republican FDIC 
when it is supposed to be impartial which, I think, raises 
questions, Mr. Chairman, about the potential politicization of 
a merger, which should not be the case.
    Are you also aware that the FDIC Chair, the White House 
official responsible for filling these vacancies, and SunTrust 
head lobbyists were all employed by the Republican Senate 
Banking Committee?
    Mr. Rogers. Representative, I was aware of that.
    Ms. Ocasio-Cortez. Okay. In other words, the primary 
regulator who is supposed to provide oversight of the industry, 
ask the toughest questions, and scrutinize the merger has 
longstanding ties through her former employment to one of the 
banks requesting this merger.
    I think it is something that should be noted and I think it 
raises questions about the process through which it is 
happening on the executive level. I understand you are not 
responsible for those appointments.
    And, lastly, it is also true that this will be the largest 
bank, even though it would not be deemed too-big-to-fail 
nationally. This will be the largest bank in Georgia, West 
Virginia, and Virginia, and the second largest bank in Maryland 
and North Carolina. Correct?
    Mr. King. I believe that is correct.
    Ms. Ocasio-Cortez. Okay. Thank you.
    I yield back.
    Mr. Lawson. Thank you.
    The Chair now recognizes the gentleman from Tennessee, Mr. 
Rose, for 5 minutes.
    Mr. Rose. Thank you, Mr. Lawson. I appreciate the 
opportunity.
    And thank you, Mr. King and Mr. Rogers, for being with us 
today, although I must say, to some degree, I question why we 
have you here. It has long been my belief that free markets 
with proper regulatory oversight bring about outcomes that work 
efficiently for both consumers and share holders.
    Banking, of course, is a highly competitive industry. 
Shareholders demand their banks are innovative and serve the 
needs of customers because otherwise those customers, quite 
simply, will go somewhere else and I am sure you have both 
experienced that. At the end of the day, history shows us that 
competition is the ultimate consumer protection.
    And I share the concerns of some of my colleagues across 
the aisle about the politicization, if I say that correctly, of 
the regulatory oversight and so I might just say that our 
intervention in mergers like this where there is a proper 
regulatory framework, I think is, in fact, the source of in 
some cases of that politicization, if I can say it.
    And I appreciate also the concerns from my colleagues from 
Georgia, notwithstanding their maybe outsized claims about the 
prospects for their local baseball team, and it struck me that 
it was just 30 years ago that SunTrust merged with the old 
Third National Bank in Nashville and there were concerns then 
about the future of that institution as it related to both 
Nashville and the broader Tennessee community. But I think that 
experience also proves that those combinations led to efficient 
markets, and I think we should trust those markets for the 
market-optimizing solutions that we trust free markets to 
deliver.
    I do have concerns that I wanted to address with the two of 
you today about what I fear are lingering effects of Operation 
Choke Point, particularly with regard to bank customers that 
operate independent ATM machines and networks.
    And I wonder if the two of you could address this and let 
me know, have either of your banks unbanked independent ATM 
operators in the past 18 months, and what visibility can you 
give us to your policy going forward with respect to dealing 
with those particular customers?
    Mr. King. Representative, I do not recall us unbanking 
anybody dealing directly as an independent ATM operator nor 
would I find that to be an offensive business. We are for 
competition. We would say that anyone that operates an 
independent ATM operation should follow the rules and 
regulations that are promulgated, that apply to all of us so 
that our clients will be safe in terms of their privacy of 
information and the privacy of their money and security of 
their money.
    Mr. Rose. Mr. Rogers, do you have anything to add?
    Mr. Rogers. Representative, I am not aware of any action we 
have taken but I would have to get back to you on that.
    Mr. Rose. I would appreciate it if you would get back to me 
following the hearing on that.
    I note that Operation Choke Point has ostensibly been ended 
and is a stain in my opinion on some of our government 
regulatory and criminal justice or justice players.
    But I wonder if your banks are continuing to receive any 
pressure from bank regulators or other governmental authorities 
to unbank customers of any description?
    Mr. King. Representative, we are not.
    Mr. Rogers. Representative, I have not had that experience.
    Mr. Rose. And then my concerns about the remnants, if you 
will, of Operation Choke Point and related or similar unbanking 
efforts or movements driven by perhaps special interest extends 
to other legal businesses and industries.
    In particular, I might mention a few: gun dealers and 
manufacturers; small-dollar lenders; and legal detention center 
operators.
    Given the scale of the combined institution that Truist 
will be, could you tell us a little about if you have any plans 
and what your policies might be going forward with whether or 
not you might choose to disfavor what are otherwise legal 
businesses?
    Mr. King. Representative, we cannot speak specifically with 
regard to what the Truist policies will be since Truist does 
not exist today. We will have a process where management will 
make recommendations to our board, and they will approve the 
final policies for Truist.
    But for BB&T, I can tell you that we try very hard to help 
our clients achieve economic success and financial security. We 
focus on lawful institutions and then we consider many other 
factors, financial and economic, in terms of deciding whether 
or not they are a bankable enterprise.
    Mr. Rose. And that seems very reasonable.
    Mr. Rogers, could you--
    Mr. Lawson. The gentleman's time has expired.
    Mr. Rose. Thank you.
    I yield back.
    Mr. Lawson. Thank you.
    The Chair now recognizes the gentlelady from Ohio, Mrs. 
Beatty, who is also the Chair of our Subcommittee on Diversity 
and Inclusion. She is recognized for 5 minutes.
    Mrs. Beatty. Thank you, Mr. Chairman.
    And thank you, Mr. King and Mr. Rogers, for testifying 
today and for also coming in to talk to me about diversity and 
inclusion. I am going to take the limited time I have to divide 
it into two parts.
    My first part is I have been listening carefully and 
intensely to my colleagues on both sides of the aisle. So, I am 
going to ask you to listen intensely for my first 50 percent of 
my comments.
    I have heard you both talk about local communities. I have 
heard my colleagues on both sides, Mr. Chairman, talk about big 
government and not big banks. Maybe it is both. For me it is 
about constituents, your consumers. It is about communities, 
and it is about collaboration.
    So, here is what I want to say to you. When you have bank 
mergers--and some of this is through no fault of your own--you 
find out about the branches, and I know there are legal things 
you can't disclose.
    For me, let me tell you how I connect the dots. I have 
people who will come in and say they have lost their jobs 
because of mergers. I have communities who will say it was the 
only bank in my community, like when we take away grocery 
stores and create food deserts. I really respect the technology 
and online.
    But let me just tell you in my district, in many rural 
parts of the State of Ohio, people can't get online. There are 
elderly people who can who choose not to and that they go--my 
father walked into his bank every weekend and banked. He never 
thought about getting online. I have young people who get 
online. I have Gen X and Gen X who only get online but they, 
too, have concerns when you have mergers, because they are 
underbanked or they are unbanked, and they can't get their 
loans and mortgages.
    This week, I have had more people call me about, how do we 
close the wealth gap and the lack of affordable homes, and that 
ties directly back to getting loans or knowing how to bank.
    The other thing right here in this committee, 56 Members, 
Democrats and Republicans, voted for a bill that I put out that 
the Federal Reserve banks must have people of color sitting 
there because it makes a difference when you are in the room. 
If there is a female, if there is a person who is Brown or 
Black, knowing the experiences that many others haven't had, I 
personally believe it makes a difference.
    So, when I think about what are the real issues here, it is 
about getting educated, getting the communities educated, and 
you doing a better job. When you pull it up and you see all 
these lawsuits, you see the Black farmers are opposed to this, 
because they have not been educated.
    For me, it is structural, racial disparities that we need 
to work on. So, let me go to the DNI and say you have done a 
great job in presenting your case on what you have done.
    Here is where you haven't done a great job, and here is 
where it ties into the wealth gap. When I look at what I call 
business diversity--and we have had this conversation. So, 
let's just take for the sake of time when we talk about 
utilizing diverse asset managers across your various platforms, 
including the 401K, the pension plans, the wealth management; 
that is where banks like you have failed. We do not have it. If 
we look at the law firms and the accountants, I won't go 
through the numbers because they are minuscule.
    So, my question to you for us to take away all of the 
negatives--and they are out there--and how we deal with 
removing the disparities, it starts with a commitment to a 
plan. And so I am asking, what are your partnerships with the 
Urban League, with the NAACP, with the Hispanic Caucus, with 
women's programs, with the farmers' programs, with the 
veterans? Those are the kinds of things you have to do to build 
platforms. It is not always money. It is access and fair 
treatment.
    So, I am asking for a commitment from you to go beyond the 
technology--technology is wonderful, but it cannot be the 
answer to everything.
    So, you have 15 seconds apiece to say something.
    Mr. King. Thank you, Chairwoman Beatty.
    We agree with what you are saying. We want to support 
diversity and inclusion in any form and fashion we can. We 
recognize there is much work to be done. We recognize that it 
is going to take a collaborative effort. There are a lot of 
things that need to be focused on, as you know better than 
most.
    We believe some of the most important areas are housing, 
jobs, and education. We talked about, when we met, the issues 
in education in this country. We simply have to provide a more 
even playing field for education for those that are--
    Mr. Lawson. The gentlelady's time has expired.
    Mrs. Beatty. Thank you.
    I yield back.
    Mr. Lawson. Now, the Chair will recognize the gentleman 
from Tennessee, Mr. Kustoff.
    Mr. Kustoff. Thank you, Mr. Chairman.
    I appreciate Mr. King and Mr. Rogers being here this 
morning to testify.
    If I could for a moment, I would like to comment on the 
question from the gentlewoman from New York regarding the 
composition of the FDIC. I believe there is one Democrat on the 
FDIC Board, Marty Gruenberg, who was the Chair of the FDIC 
during the Obama Administration. I believe, as the ranking 
member has already noted, Chairman McWilliams has indicated 
that the full FDIC Board will vote on this merger.
    Mr. Rogers, I represent part of Memphis, Tennessee, and 
also the west Tennessee area. You had a predecessor bank in 
Memphis, National Bank of Commerce, which you acquired in the 
mid-2000s.
    And if I could to both of you, we have talked this morning 
about branch closures, the evolution of technology, changing 
consumer habits. But if your banks merge, can you anticipate 
what the geographical footprint of your combined bank would be 
3 years down the road and 5 years down the road? In other 
words, will you operate in other States that you currently 
don't operate in today or can you envision that?
    Mr. King?
    Mr. King. Representative, I can envision that our footprint 
will look substantially like it does today, which is 17 States 
primarily in the south and southeast, expanding over to Texas. 
I can see us having a very diverse footprint between 
metropolitan areas and a lot of rural areas.
    As you may know, we are very much and happily invested in 
places like eastern Tennessee, western Tennessee, Kentucky, 
West Virginia, and eastern North Carolina. We like those 
markets. I would expect we would continue to invest in those 
markets in the foreseeable future.
    Mr. Kustoff. But you do not see any geographic expansion in 
terms of other States 3 years down the road if the merger is, 
in fact, approved?
    Mr. King. Representative, it is changing. The world is 
changing really fast. It is hard to see that far, but we have a 
lot of work to do to make sure we take care of clients and 
communities in our existing footprint.
    Mr. Kustoff. Thank you.
    As it relates to the evolution of technology--and my 
colleague, Mr. Rose, asked you about independent ATMs. What do 
you see as your ATM commitment in the regions that you serve?
    Will you grow the ATM network? Are people using ATMs these 
days? And what do you see, again, 3 years down the road and 5 
years down the road?
    Mr. Rogers. Representative, I think, like many of the 
things that we will be doing, it will be driven by the 
consumer. It will be driven by what is able to be done at an 
ATM. Today, we have ATMs that take deposits. We have ATMS that 
allow you to have a physical interaction with a representative.
    So, a lot of it will be dependent on what consumers want 
and how we deliver that and whether that can or will be 
delivered through an ATM. So it is hard to say 3 years from now 
whether we will have more or less ATMs, but I am confident we 
will have more capability to serve our clients in the physical 
and the digital ways in which they want to be served.
    Mr. Kustoff. You have touched on this, both of you have, at 
various times this morning. Why the need to merge? What 
economic conditions and what regulatory conditions drove you 
two to the decision that for the ultimate benefit of both 
banks, you need to merge?
    Mr. King. Representative, the primary factors are market 
driven, economically driven, and financially driven. The world 
has changed really, really fast in retail in general, and 
particularly in banking, and it is primarily around the use of 
technology.
    Historically, a relationship is based on quality, and 
quality was defined as the touch or the personal interaction. 
Over the last 4 or 5 years, that has changed dramatically. 
People expect today what I call real-time satisfaction. They 
expect to have the technological platform, the technological 
capability to be able to do what they want to do, when they 
want to do it, where they want to do it.
    So, as two separate institutions, we are doing okay, but as 
we looked forward, we saw a marketplace that was changing fast, 
and the larger institutions were becoming very good in the 
technological area. We simply believed, by combining together, 
we will be able to meet our clients' and our communities' needs 
even better.
    Mr. Kustoff. And you could not, existing the way you exist 
today as separate entities?
    Mr. King. Representative, we do not believe that we can 
compete effectively today nearly as well as we can combined.
    Mr. Kustoff. Thank you.
    I yield back.
    Mr. Lawson. Thank you.
    The Chair now recognizes the gentleman from Texas, Mr. 
Green, who is also the Chair of our Subcommittee on Oversight 
and Investigations. You are recognized for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman.
    I thank the witnesses for appearing as well.
    Is it true that last week, BB&T reported record earnings of 
$842 million with assets of approximately $226 billion? Is this 
true, Mr. King?
    Mr. King. Representative, that is true.
    Mr. Green. And is it also true that SunTrust has assets of 
about $216 billion?
    True, Mr. Rogers?
    Mr. Rogers. Representative, that is correct.
    Mr. Green. And is it true that, while you may not be making 
the profits that you desire--I am not sure anyone ever does, 
but is it true that you are not going out of business anytime 
soon, either of you?
    Is that a fair statement?
    Mr. King. Representative, I would not expect us to go out 
of business anytime soon.
    Mr. Green. Mr. Rogers?
    Mr. Rogers. Representative, I think that is a fair 
statement.
    Mr. Green. And is it also true that the two of you, should 
you merge, will have some 740 branches within 2 miles of each 
other?
    Fair statement?
    Mr. King. Yes, sir.
    Mr. Green. And is it also true that branches within 2 miles 
of each other can at some point be deemed as, you are competing 
against yourself? Fair statement?
    Mr. King. Well, Representative, all of the banks in those 
markets, whether they are 2 miles apart or 3 or 4 miles apart, 
are competing against each other.
    Mr. Green. But you would not want to compete against 
yourself, would you?
    Mr. King. We would tend not to want to compete against 
ourselves.
    Mr. Green. Which means that you would likely close some of 
these institutions so as to avoid self-competition. Nobody 
competes against himself or herself, if possible.
    Mr. King. Representative, this is a very complex area, and 
if I may, just because a branch is 2 miles apart does not mean 
that we would rule it to be not necessary.
    Mr. Green. Then, my guess is that you would be amenable to 
having it recorded among the merger documents that you will not 
close any of these banks that are within 2 miles of each other, 
fair statement?
    Mr. King. Representative, we have said that we are not 
going to close any branches in any States where we both do 
business for at least a year. We have said in rural markets or 
smaller markets--
    Mr. Green. Excuse me for interrupting, but time is of the 
essence. Within a year, my belief is that we will probably have 
a lifespan that will exceed a year. People who are working will 
want to keep their jobs beyond one year. So, what you are 
saying is that you may close after a year some of these banks 
that are within a couple of miles of each other, fair 
statement?
    Mr. King. Representative, that is a fair statement. We have 
also said that our client-facing performing associates will not 
lose their jobs.
    Mr. Green. Okay. If they will not lose their jobs, does 
that mean then that you won't have any layoffs at all?
    Mr. King. Representative, I did not say that, sir. We have 
said to our client-facing performing associates that they will 
not lose their jobs. There may be other opportunities 
throughout the entire enterprise where associates may be 
offered different jobs or opportunities.
    Mr. Green. Well, let's accept what you've said. Let's 
accept it. I will note that in 2004 when Bank of America merged 
with FleetBoston, they cut 12,500 jobs, approximately 7 percent 
of the workforce; and a few banks will advertise that we will 
be cutting some significant portion of our workforce at the 
genesis of a merger.
    But let's put that aside, and let's accept what you have 
said as the gospel. My grandfather was a preacher. So, forgive 
me. But let's accept it as the gospel that there will be no 
jobs lost. Are you amenable to having it made a part of your 
merger documents that, in fact, make it conditioned upon no 
jobs being lost?
    Mr. King. Representative, there are economic factors in 
this--
    Mr. Green. See, that wasn't what you said just a minute ago 
now. You said no jobs would be lost, and I am accepting that as 
the gospel. So let's put that gospel into the Bible. The Bible 
will be the merger documentation. Can we do this?
    Mr. King. Representative, I am a Baptist. So, I like to 
tell the truth.
    Mr. Green. Well, good for you.
    Mr. King. I did not say what you said. I said no client-
facing performing associates would lose their jobs.
    Mr. Green. Oh, well, then I am a Baptist as well, and I 
like to be corrected. Having been corrected, you are saying 
that some people will lose their jobs then?
    Mr. King. Representative, it is likely that some people 
will lose their jobs.
    Mr. Green. So, now let's go back.
    Mr. Chairman, I ask unanimous consent that I have an 
additional 2 minutes, without objection.
    Thank you, Mr. Chairman.
    Now, we do have people losing their jobs. Let's talk about 
what we will do for the people who will lose their jobs as we 
acknowledge that there will be job losses; and I am not going 
to try to nail you down to the numbers, so you can relax, okay? 
But we do know that people will lose their jobs.
    Are you amenable to doing more than 2-week's severance, 
which is not a golden parachute? That is what the two of you 
would get when you exit, golden parachutes, and I am not 
opposed to golden parachutes, but those are lead parachutes for 
the people who work at the lower levels in these banks.
    So, will you guarantee more than a few weeks of severance 
and more than simply counseling people? That is good. Some 
people will probably need additional training. Some people will 
probably need some additional support beyond the usual 
severance package. So now you are about to merge, and you have 
indicated that there will be job losses. You are doing quite 
well. You are making $842 million in earnings, which is a 
record for you. You are going to do well.
    I am not saying to you that you have to guarantee people a 
job for life, but you both have said that there is a good 
likelihood that you won't go out of business anytime in the 
near future. So, if you just stay apart, the people who are 
working will probably be able to keep their jobs, minus bad 
behavior, lack of competency, or other things, but they will be 
able to keep their jobs.
    So, if we are going to see this merger take place with two 
companies that are doing quite well, why not in your merger 
documents indicate that you will do more than severance and 
counseling? Would you be amenable to having that in the merger 
documents?
    Mr. King. Well, Representative, first, neither one of us is 
getting a golden parachute with regard to this merger.
    Second, we will do everything we can for our associates. I 
have been involved in almost 100 mergers--
    Mr. Green. Excuse me. Then you can indicate in your merger 
documents that you will provide more than counseling and 
severance. Will you do this?
    Mr. King. We will do everything we can possibly do--
    Mr. Green. Okay. I am going to recommend that that be in 
the merger documents.
    I thank you very much. A good Baptist. I love you. I yield 
back.
    Mr. Lawson. Okay. Without objection, the gentleman from 
North Carolina is recognized for 2 minutes.
    Mr. Budd. Thank you, Mr. Chairman.
    So, we are talking about job loss, and job creation here. 
Mr. King, you mentioned, when we were talking about the 1995 
merger with Southern National, leaving a small town which, of 
course, was going to be fearful for their jobs but you said it 
had 1,000 jobs then and it now has 2,000 jobs.
    What were some of those jobs that were created?
    Mr. King. We made Wilson our technology center, and over 
the course of these years we have created a huge number of 
technology jobs and support jobs that support those technology 
jobs. There have been marketing jobs that have been created and 
a number of other types of administrative jobs. It is primarily 
support jobs that are very stable jobs.
    Mr. Budd. So these jobs are minimum wage? I wouldn't think 
they would be.
    Mr. King. Representative, these would be relatively much 
higher paying jobs.
    Mr. Budd. One of you mentioned earlier talking about 
branches having, just the nature of the branches, they have 
some higher turnover; and we are talking about branches within 
2 miles of each other, sort of a concern there if you happen to 
close one of those one day. You talked about there not being 
expected layoffs because you could give them opportunities 
either in another branch or maybe even somewhere else in 
Truist, the combined bank.
    Talk a little bit about that.
    Mr. King. Representative, that is exactly what happens. I 
have been through many mergers, as I indicated, and what we do 
with the branches is to provide that people don't lose their 
jobs, as I indicated. We promise them jobs. Even if we 
consolidate branches, we pull the employees together because we 
still have the business. Then sometimes they relocate, but they 
have jobs.
    In the back room we work very hard to offer, first of all, 
our associates opportunities to retrain and take other jobs, 
relocate to markets where there are openings for their existing 
job; and then in the final analysis, if we try really hard and 
can't find a job, we have a very robust outplacement service 
and relocation service for them.
    Mr. Budd. Thank you.
    My time has expired.
    Mr. Lawson. Okay. I would like to thank the witnesses for 
their testimony today, and I see the chairwoman just walked in. 
I did want to see if she had any comments before we adjourn. 
Thank you.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    This hearing is now adjourned.
    [Whereupon, at 12:57 p.m., the hearing was adjourned.]

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