Via facsimile and U.S. Mail

Mr. Robert E. Feldman
Executive Secretary
ATTENTION: Comments/OES
Federal Deposit Insurance Corporation
550 - 17th Street, N.W.
Washington, DC 20429

RE:  Proposed Rule, Insurance of State Banks Chartered as Limited Liability
Companies, 12 CFR Part 303

Dear Mr. Feldman:

The Louisiana Bankers Association appreciates this opportunity to comment on the notice of proposed rulemaking to clarify that a bank that is chartered as a Limited Liability Company (LLC) under State law would be considered to be "incorporated" under state law if it meets certain criteria.

The LBA supports the clarification by the FDIC that would permit a bank to be chartered as an LLC.  The limited liability company is a form of legal entity now recognized and permitted in Louisiana.¹  Such an entity did not exist when the Federal Deposit Insurance Act was first enacted.  The LLC has become an accepted and popular form of legal entity for doing business in Louisiana.  The LLC entity enables a business to avail itself of the pass-through tax advantage.  The pass-through tax advantage is currently only available to Subchapter S banks.  Many banks in Louisiana however are unable to meet the qualifications to convert to Subchapter S status; yet, they would qualify to convert to an LLC.  The proposed clarification by the FDIC would remove a major impediment to state-chartered banks in Louisiana being able to use the beneficial LLC structure.

In conclusion, the Louisiana Bankers Association supports the clarification of the FDIC Act to interpret the term "incorporated" to include limited liability companies.  Such a clarification would enable our members to use a form of legal entity now available to most other industries in Louisiana.

Thank you for the opportunity to present our views.  If you need additional information, please feel free to contact me at (225) 214-4836.

Sincerely,

David J. Boneno
General Counsel
Louisiana Bankers Association
P.O. Box 2871
Baton Rouge, LA  70821-2871

CC:  John Travis, Commissioner
Louisiana Office of Financial Institutions

¹  LSA-R.S. 12:1301 et seq.