Bank M&A May Hinge on Deposit Cap Rule

Federal lawmakers are going to need to do something soon regarding the limits on how much deposit market share banks can take, whether the caps are increased or repealed altogether.

The financial crisis has essentially crippled most major U.S. financial institutions, moving regulators at times to encourage, with the help of federal assistance in some cases, healthier banks to acquire weaker ones.

But laws setting a 10% cap on overall U.S. deposits could stymie further acquisitions for the three largest banks: Bank of America (BAC Quote), JPMorgan Chase (JPM Quote) and Wells Fargo (WFC Quote). Until something is done about the deposit cap, these banks, all of which have recently made significant acquisitions, may not be able to do further opportunistic deals for some time, analysts say. ...