FDIC Federal Register Citations

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

ATTN:  Comments/OES

Dear Sir:

State chartered banks that are constituted in the form of limited liability companies should be eligible for FDIC insurance.  Approximately 60-65% of the approximately 300 bank members of the Independent Community Bankers of Minnesota (ICBM) are state chartered so this issue is meaningful to them.

The questions FDIC poses and ICBM's responses are:
1)  Should the FDIC permit a state bank organized as an LLC to obtain federal deposit insurance?
Yes.  So long as state law provides for the alternative structural forms that can "hold" the state bank charter and requires that all FDIC criteria be met then the applicant entity should be eligible for deposit insurance.

2)  If so, should the FDIC interpret the term "incorporated" utilizing some, all, or none of the traditional four corporate attributes?
The only "incorporated" attribute of concern regarding LLC's or similar entities relates to the "transferability of ownership interest."  Reasonable qualifications on transferability that are of particular concern to small business ownership should be acceptable.

3) If the FDIC should not utilize any of the four corporate attributes, how should it interpret the term "incorporated?"
If the applicant entity is chartered under and conforms to applicable state law and meets other requirements that protect the insurance fund, its compliance with traditional corporate attributes should be construed liberally.

Thank you for this opportunity to comment.

Sincerely,

Allen I. Olson
President/CEO
Independent Community Bankers of Minnesota
2600 Eagan Woods Drive, Suite 200
Egan, MN  55121