Texas Attorney General Ken Paxton today announced Texas and a multistate coalition, in cooperation with the U.S. Department of Justice Antitrust Division (USDOJ), reached a settlement with Springleaf Holdings, Inc. to address potential antitrust concerns. As part of the agreement, Springleaf will have to sell 10 of its branches in Texas and abide by other stipulations before continuing its $4.25 billion acquisition of OneMain Financial, a subsidiary of Citigroup, Inc.
“Without the proper protections in place, this acquisition would mean fewer choices for borrowers with limited credit options,” said Attorney General Paxton. “My office will continue to protect choices for Texas consumers by stopping those trying to take away competition through the acquisition of their rivals.”
The Texas Attorney General’s Office Antitrust Section, along with the states of Colorado, Idaho, Pennsylvania, Virginia, Washington, and West Virginia and USDOJ filed a civil antitrust lawsuit today to stop the anticompetitive effects of the acquisition. The States’ suit was filed in the United States District Court for the District of Columbia and the settlement was filed at the same time. In the settlement agreement, Springleaf and OneMain will be required to take several measures to comply with state and federal antitrust laws, including:
- Divest over 120 retail branch locations, including 10 branches across Texas – in Amarillo, Beaumont, Bryan, Burleson, Del Rio, Denton, Lake Jackson, Lufkin, Odessa, and San Angelo;
- Waive all non-competition agreements with certain employees so that the company acquiring the divested branches can make offers of employment to existing employees; and
- Preserve all existing relationships with loan customers.
OneMain and Springleaf are the two largest lenders that offer personal installment loans to subprime borrowers in the United States, and the only two with a nationwide branch network. Following the comment period of 60 days, the court will determine whether the agreement is “in the public interest.”
View the filed documents: