Watchdog urges Fed to investigate Fifth Third–Comerica merger

Fair Finance Watch, a self-described watchdog for the financial services industry, has filed early opposition to Fifth Third Bank‘s proposed acquisition of Comerica, urging the Federal Reserve to hold public hearings and scrutinize the Cincinnati-based lender’s mortgage lending record before approving the deal.

In a letter sent Oct. 8 to Fed Chair Jerome Powell and Secretary Ann Misback, Fair Finance Watch executive director Matthew Lee alleged that Fifth Third shows “a nationwide pattern of disparities” in mortgage lending to Black borrowers, citing 2024 Home Mortgage Disclosure Act (HMDA) data.

Lee, who is also listed as a senior reporter at Inner City Press, shared the letter with HousingWire, some of which is available on the outlet’s website.

Fair Finance Watch claims that Fifth Third denied more mortgage applications from Black borrowers than it approved, while white applicants saw the opposite trend. “This is disparate,” the group wrote repeatedly in its filing.

Fair Finance Watch also pointed to Fifth Third’s regulatory history. It referenced Consumer Financial Protection Bureau actions against the bank, including the agency’s order for the bank to pay $20 million in penalties and redress in 2023 related to allegations of fake accounts and forced vehicle insurance.

The organization further criticized Fifth Third’s branch closures in low- and moderate-income areas, and it accused regulators of “rubber-stamping” mergers involving banks with weak Community Reinvestment Act records. Lee said the Fed should extend the public comment period and hold evidentiary hearings on the merger before taking any action.

“The Community Reinvestment Act specifies that regulators must consider an institution’s record of meeting community credit needs,” the letter stated. “On the current record, the application should not be approved.”

Fifth Third announced plans on Monday to acquire Comerica in an all-stock deal valued at about $10.9 billion. The transaction, pending regulatory and shareholder approvals, would expand Fifth Third’s footprint in Texas and the Midwest, making it the ninth-largest bank in the country.

Neither the Federal Reserve nor Fifth Third immediately responded to HousingWire’s requests for comment.