OK 13 205 239DM PA BEPK OF BANKlNG HBQ PA NO 1050 P 3Robert B FeldmanDecember 13 2005Page 2Pernnsylvaniia is a longstanding member of the Conference Df Stat Bank Supervisors which hasVigorously repres ID: 898047
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1 DEC, 13_ QOQ5 2.39PM PA DErPr OF 3ANKING
DEC, 13_ QOQ5 2.39PM PA DErPr OF 3ANKING H3C, PA NO. 105Q P 2C'OMMONWVEALTH o3F PENNSYLVANIA.DErPARTMENT OF BANKING23 M\ARKET 5TREET, 11=1h RLDORHARRISSUF5, PEN NSYLVANIA ~71C1-22C~OA WILLIAM SCHENCK m o"' 00 TELEPHIONE. )I7-7G7-bql5EtflETARY OF RANKING Deccmber1,:200 OK 13. 205 2:39DM PA BEPK OF BANKlNG HBQ PA NO. 1050 P, 3Robert B. FeldmanDecember 13, 2005Page 2Pernnsylvaniia is a longstanding member of the Conference Df Stat Bank Supervisors, which hasVigorously represented states rights and the interests of state regulatory agencies. We concurwith the comments of CSBS in suggesting that the FDIC proposal provides a remedy to restorebalance to a banking system that has tilted to the favor of federally chartered institutionsoperating nationally and the detriment of state, community and local banks. In thlis regard, Ihave personally Iad conversations with the management of federally chartered institutionsconsidering con-version to a Pennsylvania state charter. Those institutions have advised us thatthey were constrained in converting due to widely divergent and restrictive state laws andregulations, excluding the laws o (the Commonwealth, which currently are not applicable to theirnational operations in the states where they are based, but would appl
2 y upon conversion. Thieadministrative co
y upon conversion. Thieadministrative cost and impact on business operations by conversion to the state charter weredeemed overly burdensome byrmantagement and their respective boards. Thus, that competitivedisadvantage has become very real to us in Pennisylvani a.We cannot countenance the status quo preemption of state law continuing to occur Lunder ourwatch. While we very i-nucF respect the positions of fellow state regulators whitch reject theFDIC proposal couching the, ultimate outcome as a race to the, bottom, we are compelled todisagree. Our institutions deserve no less than our strong advocacy in support of their continuedviability and growth, and the states mnust be free to serve as laboratories for innovation andcreativity. Without a level playing field for baniking institttions in the United States, thernumberof state chartered institutions will continue to decline, an untenable situation for state regulatorsand our banking industi-y, and the states will ultimately regulate only small or problematicinstitutions within their borders.We appreciate thie work of the FDIC Board and its staff and commend your efforts in consideringthis Innovative proposal to bring vitality back to the state system and preserve dual banking.Sincerely,A. Wi hiamScec