Memo RM1995-13B
May 8, 1995
For More Information, Call: Frank D. Dunnick, Kansas Bank Commissioner
(785) 296-2266
State Bank Regulators unveil guidelines for interstate supervision
The nation's state bank regulators today unveiled guidelines for the supervision of state-chartered banks that operate across state lines. Kansas Bank Commissioner Frank Dunnick announced the adoption of these guidelines in conjunction with a Washington press conference held today by the Conference of State Bank Supervisors (CSBS), the national association of state officials responsible for chartering, regulating and supervising the nation's 7,680 state-chartered commercial and savings banks.
Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, states have until June 1, 1997 to "opt in" or "opt out" of interstate branching. Six states have already acted to allow interstate branching on or before June 1, 1997. Since enactment of Riegle-Neal last year, Commissioner Dunnick and his fellow state bank regulators have been working through their association, CSBS, to develop guidelines for the supervision of state-chartered banks that operate across state lines. State regulators approved these guidelines unanimously at the CSBS Annual Meeting late last month.
The guidelines lay out the responsibilities of "home states" (states in, which an out-of-state bank operates branches) for the supervision of state-chartered banks that operate across state lines. The purpose of these guidelines is to create a system of seamless supervision for multi-state banking organizations that ensures safety and soundness and provides a single point of contact between the bank and its regulators.
Under these guidelines, a multi-state bank will deal only with its "home state" regulator for almost all purposes, including safety and soundness and application procedures. The "home state" regulator of a multi-state bank will assume the primary responsibility for determining the safety and soundness of the institution. It will also handle applications for new facilities, mergers, new powers, and corporate matters. The home state regulator will consult with regulators from the bank's host state in these processes, and will coordinate the bank's supervision with the host state and the bank's federal regulator. The home state regulator will also actively participate in ensuring the bank's compliance with applicable host state laws. The Riegle-Neal Act specifically provides host state authority to ensure compliance with certain laws; the guidelines lay out procedures for host states to coordinate these activities with an institution's home state regulator.
"As we move toward an environment of nationwide banking," Commissioner Dunnick said today, "it's my responsibility to make sure that the people of Kansas continue to have access to safe, sound, responsive banking services. These guidelines will benefit the public by ensuring that our state-chartered banks can take advantage of the efficiencies of the interstate environment, while protecting the economic well-being of our citizens."
The supervisory guidelines are available at the Office of the State Bank Commissioner by calling (785) 296-2266 or writing 700 SW Jackson Street, Suite 300, Topeka, Kansas 66603.
