CONFERENCE OF STATE BANK SUPERVISORS

Champion of the State Banking System and State Regulation of Financial Services

Statement of Principles & Core Beliefs

State System of Banking

• Our overriding goal is to maintain the state system as the charter of choice for community, multi-state, international and de novo financial institutions.
• The states must retain their role as the front-line, grass-roots regulator for the financial services industry.
• As state bank supervisors, we work at both the state and federal level for focused and efficient bank supervision.
• Federal regulatory preemption of state laws endangers the dual banking system and consumer protection.
• Through CSBS, the collective states have a single voice with Congress and federal policy makers and an organization for maintaining a pool of well-trained, focused banking regulation professionals.

Safety & Soundness of Financial Institutions and the Banking System

• We believe that a significant goal of bank supervision and examination is to assure the safety and soundness of individual financial institutions and the overall banking system.
• Cooperation between state and federal regulators strengthens bank supervision, the financial services industry, and the economy.
• We support financial independence and budget autonomy for state banking departments as they pursue excellence in supervision.

Compliance with Banking and Consumer Laws

• We believe that bank supervision at the state level provides regulators that are accessible, who understand state laws, are in tune with the local economy, and knowledgeable about the consumer.
• We agree that for the supervision of interstate banks, the home state banking supervisor should be the primary regulator.

Promoting Economic Development

• We recognize that community banks, most of which are state-chartered, drive the economic success of Main Street America.
• We support the authority of our states to empower banks to develop new services that serve the best interests of our citizens.

Improving Mortgage Industry Supervision through Collaboration and Technology

• Given the impact of housing on our local communities and economies, we believe that states must continue to play a major regulatory and enforcement role in the supervision of the mortgage industry.
• We believe that the modern evolution of the mortgage industry and the increased importance of protecting consumers and neighborhoods demands new tools and authorities for state regulators.
• We support a coordinated federal and state supervisory framework that will provide maximum transparency and accountability in the mortgage lending process.
• Working with the American Association of Residential Mortgage Regulators (AARMR), we are committed to the development of an automated, internet-based nationwide mortgage licensing system that will provide state regulators, the mortgage industry and the general public with a centralized source of information about state-licensed mortgage providers.

Approved by the CSBS Board of Directors, December 2007