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.