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January 11, 2002
The Honorable George W. Bush
President of the United States
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20500
Dear Mr. President:
We are writing to ask you not to include in your 2003 budget the
requirement for new federal fees on state-chartered banks and bank
holding companies. As you know, both the House and the Senate
have rejected this proposal for the last eight years. In fact, the
Senate unanimously rejected this proposal last year by adopting the
Enzi -Carper amendment to the budget that was co-sponsored by
eighteen Senators.
The Conference of State Bank Supervisors (CSBS) has repeatedly
opposed this new tax on state-chartered institutions in previous
budget proposals, and highlighted the destructive impact of this tax
on the dual banking system ? a system that has served our
communities and national economy so well. CSBS is the professional
association of state and territorial officials who charter, examine,
supervise, and regulate the nation's approximately 6,400
state-chartered banks and nearly 400 state-licensed branches and
agencies of foreign banks.
At present, the fee structure for federally-chartered and
state-chartered banks is identical: both pay their chartering
organization for their examinations, and pay deposit insurance
premiums to the FDIC. This fee structure is a linchpin of the dual
banking system. A new federal fee would seriously handicap
state-chartered institutions, damaging the dual banking system.
Imposing additional direct federal fees on state-chartered
institutions will not increase bank safety and soundness. No
additional examinations will occur, only additional costs. State
bank exam fees are generally much lower than those charged by the
OCC. States have worked hard to keep these fees low and are proud of
their efficient, effective state banking departments. Past budget
proposals to increase exam fees have claimed to ?reduce the
inequity? among FDIC-insured banks, but in effect would have
punished state-chartered banks for choosing more cost-effective
supervision, and punished bank holding companies for choosing that
structure.
State-chartered banks, which the members of CSBS supervise and
regulate, are important engines of local economic development. They
are the primary lenders to small businesses, which, as you know,
create the vast majority of new jobs in the United States. They have
also been innovators in providing new products and services to their
customers.
Congress has rejected new federal fees on state-chartered banks
on eight separate occasions. We urge you to reject this proposal
in your 2003 budget. Enclosed are the budget views of the House
Financial Services and Senate Banking Committees as well as a letter
from Senate Banking Committee members in opposition to these new
exam fees.
We look forward to working with you to strengthen our financial
services system, and thank you for your consideration. Please call
upon us whenever we can be of assistance to you and your
Administration.
Best personal regards,
Neil Milner
President and CEO |
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