FDIC Plan to Review Vanguard, BlackRock Bank Stakes Draws Fire

The Federal Deposit Insurance Corp. lacks the authority for its plan to review large stakes investment companies such as Vanguard Group Inc. and BlackRock Inc. hold in banks, industry groups and state banking regulators say.

The FDIC in July issued a proposal that would require investors seeking to purchase at least 10% of a federally insured bank’s stock to provide advance notice to the regulator. The FDIC would review a potential purchase even if the Federal Reserve had already approved it.

But the agency may not have the power to finalize its rule, the US Chamber of Commerce said in ...