It's Time to Fill State Regulator Seat on FDIC Board
“The Conference of State Bank Supervisors (CSBS) commends Senator Orrin Hatch (R-UT), Senator Mazie Hirono (D-HI), Representative Frank Lucas (R-OK), and Representative Denny Heck (D-WA) for introducing bipartisan legislation (S. 1910 and H.R. 3915) ensuring the FDIC Board include a state regulator.
“State bank regulators provide a unique perspective on how banking services affect local communities. State regulators – who charter and supervise 78 percent of all U.S. banks -- are mandated to ensure the safety and soundness of these banks, protect consumers, and support the economic health of their communities.
“It is for these reasons that Congress, over 20 years ago, mandated that the FDIC Board include an individual with experience as a state banking regulator. Since then, Congress has repeatedly affirmed and expanded the role state regulators play in America’s diverse financial services ecosystem.
“These bills are yet another bipartisan affirmation by Congress that the state perspective is indispensable to creating effective, common-sense bank regulation. We look forward to working with Congress on swift passage.”
- Congress passed in 1996 legislation requiring that one FDIC Board member “shall have State bank supervisory experience.”
- Congress’ clear intent when passing this legislation was that at least one FDIC Board member have experience as a state official responsible for bank supervision.
- Currently, and for the past several years, this legal requirement has not been met.
- The State Regulatory Representation Clarification Act clarifies the current law, making clear that the FDIC Board must include at least one member who worked in state government as a state bank supervisor.