| FOR IMMEDIATE RELEASE: August 19, 1996
Patrick M. McQueen, Commissioner of Michigan's Financial Institutions
Bureau, announced today that he has signed landmark agreements to
cooperate with 15 state and federal regulators to create a seamless
supervisory environment for state-chartered banks that branch across
state lines in the Midwest. The agreements are the third set of
regional pacts to be signed among the state regulators since the
enactment of the Riegle-Neal Interstate Banking and Branching Efficiency
Act in 1994.
The agreements establish procedures for state banking departments,
the Federal Deposit Insurance Corporation, and the Federal Reserve
Banks of Chicago, Cleveland, St. Louis, and Minneapolis to coordinate
the supervision of multi-state, state-chartered banks. It lays out
the roles of home states and regions (where a bank is headquartered)
and host states and regions (where a bank has branches) in the supervision
of multi-state, state-chartered banks. Under the agreements, the
home state supervisor will be the primary regulator and provide
a single point of contact for the institution. Host state law will
apply to out-of-state branches in the areas of antitrust and deposit
concentration limits, intrastate branching, community reinvestment,
consumer protection, and fair lending.
The agreements will improve the Financial Institutions Bureau's
ability to monitor the safety and soundness of these interstate
banks by ensuring that all regulators have access to the information
they need. At the same time, the agreements will also reduce supervisory
burdens on these banks by reducing duplication and ensuring consistency.
They will also enhance responsiveness to local needs in an interstate
banking and branching environment.
"With these agreements, everybody wins: the consumer, the
business community, and the banking industry," McQueen said
in making today's announcement. "They are a perfect example
of how state regulation can adapt and innovate in response to changes
in our market system. State bank regulation has always been known
for its innovation, its flexibility, and its dedication to preserving
safe and sound banks for our citizens. These agreements ensure that
all these benefits will continue in an interstate branching system."
Michigan enacted an interstate branching law in 1995. Forty states,
the District of Columbia, and Puerto Rico have now acted to allow
interstate branching on or before June 1, 1997.
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