Muldoon
Murphy Faucette & Aguggia LLP
May 3, 2004
Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, D.C. 20429
Re: Proposed Rulemaking: Filing Procedures Affiliate Transactions,
69 Federal Register 12571, RIN 3064-AC78 (March 17, 2004)
Dear Mr. Feldman:
This law firm emphasizes the representation of depository institutions
before the federal and state regulatory agencies. As such, the firm
represents numerous nonmember state banks that would be subject to
the referenced proposed rule regarding Sections 23A and 23B of the
Federal Reserve Act, if finalized, and it is in this context that
we offer our comments.
The proposed rule would adopt language incorporating by reference
the Federal Reserve Board's Regulation W, 12 C.F.R. Part 223, and
would apply Regulation W to nonmember banks in the same manner and
to the same extent as if they were member banks of the Federal Reserve
System. The proposed rule would, however, establish the FDIC, rather
than the Federal Reserve Board, as the appropriate agency to rule
on exemption requests and hearings involving the exercise of a controlling influence affecting nonmember banks.
The preamble to the proposed rule notes that the Federal Reserve
Board has previously been the agency that was viewed as having responsibility
for ruling on exceptions and conducting control influence hearings,
including with respect to nonmember banks. We have no particular
preference as to which agency handles these matters. However, although
the preamble notes that the Federal Reserve has consulted with the
FDIC in the past regarding individual exemption requests by nonmember
banks, we are concerned that there is no indication that the Federal
Reserve Board has agreed with the approach suggested in the FDIC's
proposed rule. If would be extremely unfortunate if the FDIC finalized
the proposed rule but the Federal Reserve Board interpreted Section 23A to require it to act on these matters rather
than the institution's primary federal regulator. Nonmember banks
would then be faced with the prospect of duplicative filing requirements
with multiple agencies, and even with the possibility of contradicting
rulings. This would cause considerable confusion and unnecessarily
increase the regulatory burden on nonmember banks.
We also note
that the Office of Thrift Supervision ("OTS")
apparently did not take a approach similar to that of the FDIC in
amending its regulations to incorporate Regulation W, at least as
to exception requests. 68 Federal Register 57790 (October 7, 2003).
Again, while we have no particular preference as to whether the individual
agencies handle these matters as to their constituent institutions
or whether the Federal Reserve Board does so for all institutions,
we believe that it is in the best interests of all insured banks
and savings associations that the FDIC, Federal Reserve, OTS and
Office of the Comptroller of the Currency adopt a coordinated approach
regarding exemption requests and control influence hearings. As such,
we suggest that the FDIC not adopt its proposed procedures regarding
exception requests and control influence hearings without ensuring
agreement among the agencies on a uniform approach.
Thank you for the opportunity to provide this comment.
Very truly yours,
MULDOON MURPHY FAUCETTE & AGUGGIA LLP
Joseph P. Daly
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