Legislation which clarifies that a person with state banking regulatory experience must be a member of the Federal Deposit Insurance Corp. (FDIC) Board has been introduced in the Senate; a similar measure has been unveiled in the House.
The bill, S.1910, the “State Regulatory Representation Clarification Act,” was introduced by Sens. Orrin Hatch (R-Utah, and chairman of the Senate Finance Committee), and Mazie Hirono (D-Hawaii). A similar measure has been introduced in the House (H.R. 3915) by Reps. Frank D. Lucas (R-Okla.) and Denny Heck (D-Wash.) both are members of the Financial Services Committee.
The legislation is intended to make clear that the FDIC Board must include at least one member who worked in state government as a state bank supervisor, as required under current law.
In 1996, Congress passed a measure requiring that one FDIC Board member “shall have State bank supervisory experience,” supporters of the legislation point out. However, they say, now and for the past several years, the legal requirement has not been met (for example, with individuals experienced as federal regulators of state-chartered institutions being appointed).
The Conference of State Bank Supervisors (CSBS) asserts that Congress’ clear intent when passing the bill was that at least one FDIC Board member have experience as a state official responsible for bank supervision.
The two bills are being watched closely by other interested groups, including the National Association of State Credit Union Supervisors (NASCUS), which has long advocated that a member of the NCUA Board include at least one seat on the NCUA Board should be designated for a candidate who has served as a state credit union supervisor.
S.1910 – State Regulatory Representation Clarification Act
CSBS President and CEO John W. Ryan on The State Regulatory Representation Clarification Act