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(Reuters) -Two U.S. regulators have approved the sale of a majority stake in TIAA’s banking arm to a consortium of private equity firms, a TIAA spokesperson said on Friday.
The spokesperson said TIAA now expects the deal to be completed as early as this summer after the Federal Reserve and the Office of the Comptroller of the Currency (OCC) offered their clearance. TIAA had previously given itself the entirety of 2023 to win the approvals needed for deal completion.
A Fed spokesperson confirmed the agency had approved the bank holding company application tied to the TIAA’s new bank charter required for the deal. An OCC spokesperson did not respond to a request for comment.
The deal with the private equity firms, which include Stone Point Capital, Warburg Pincus, Reverence Capital Partners, Sixth Street and Bayview Asset Management, remains subject to approval by the New York Department of Financial Services, which did not respond to a request for comment.
Spokespeople for Warburg Pincus and Sixth Street also declined to comment. Stone Point, Reverence and Bayview did not respond to requests for comment.
The sign-offs come as regulators have been considering what role private equity firms should play in the U.S. banking sector after the collapse of regional lenders Silicon Valley Bank, Signature Bank (OTC:SBNY) and First Republic Bank (OTC:FRCB).
Private equity firms unsuccessfully pursued some of the assets of Silicon Valley Bank once it was taken over by regulators in March.
The regulatory blessings, roughly six months after the transaction was announced, stand in contrast with many slow deal approval processes under President Joe Biden, whose administration has been skeptical about the benefits of consolidation for consumers.
In one example of a bank deal taking much longer to close, Columbia Banking System (NASDAQ:COLB) Inc and Umpqua Holdings (NASDAQ:UMPQ) Corporation completed their merger on Mar. 1, more than 16 months after announcing it.
In TIAA’s case, regulators did not have to scrutinize any one private equity firm as the acquirer of a controlling interest because they are all assuming minority stakes. This helped move the regulatory process along, according to sources aware of the matter, who spoke on condition of anonymity to discuss private deliberations.
