MR. KROENER: Okay. We will resume. I want to welcome our next panelists. Ms. Thomas, you're up first. Please go ahead. Welcome.
MS. THOMAS: Thank you Mr. Kroener. Good morning. I am Karen Thomas; I'm pleased to testify on behalf of the Independent Community Bankers of America today on the financial services roundtable petition to the FDIC for rule making to preempt certain state laws.
ICBA commends the FDIC and the financial services roundtable for helping to focus debate on the crucial issues giving rise to the petition. The subject of today's hearing is an important and complex one.
The future health and viability of our nation's dual banking system is critical to the continued vibrancy and diversity of the banking industry.
In turn, a vibrant diverse banking industry strengthens the health of our nation's economy and promotes financial services that are efficient and responsive to our nation's consumers and businesses.
ICBA is a strong proponent of the dual banking system and of a strong and robust state banking system. However, as assets in the industry become more and more concentrated in the national charter, we are becoming increasingly concerned that the balance between the federal and state systems is being tilted too far in one direction.
The balance in the dual banking system needs to be restored. However, ICBA has not determined whether the recommendations in the roundtable's petition are the appropriate solutions and we question whether a regulatory forum as opposed to the Congress is the appropriate one.
Accordingly, we neither support nor oppose the recommendations of the petition at this time. Overall, the petition highlights the complexities surrounding the issue of what laws, state, national or both, should be applicable to a national bank or a state chartered bank conducting activities in more than one state.
These questions are becoming even more difficult as the banking industry continues to evolve, the market place changes, industry concentration increases and nationwide or region wide operations become more and more dominant.
The petition highlights the challenges in crafting rules that promote the dual banking system and recognize our nation's tradition of federalism where the states retain certain powers in the face of these changes.
ICBA does not expect that the roundtable's petition or the FDIC's action on it will resolve these issues or be the end of the story. We do have a number of concerns and considerations that we believe policy makers and others must consider as the debate and dialogue continue.
The dual banking system with bank chartering, supervision and regulation divided between the federal government and the states has served our nation and the banking industry well. The dual banking system should be protected while also insuring consumers and businesses have access to a full range of competitive banking products regardless of their bank's charter.
Support for the dual banking system remains vigorous among community bankers who value the productive tension between state and federal regulators. Many community bankers view one set of rules issued by one federal banking regulator as an undue concentration of power.
The dual banking system is part of our nation's tradition and philosophy of checks and balances. In addition to favoring regulatory choice and dispersion of power, many community bankers view state regulators as more attuned to the environment and needs of their state.
Just as community banks are locally focused, state regulators are locally focused as well and can be responsive and flexible in addressing local needs.
ICBA's membership closely mirrors that of the industry. We have 76 percent of our members with state charters and 24 percent with national charters. A very small percentage of our state chartered members have branches in more than one state.
Many others; however, operate near state borders or provide products and services electronically and they wish to serve customers in another state.
Our many members that operate exclusively or predominantly in one state will also be affected by the choices and decisions made in this debate.
The ICBA understand the impetus for the OCC's February 2004 preemption rule. The desire to bring clarity to the preemption issue and provide national banks with a degree in certainty in conducting their operations.
However, in ICBA's view, it would have been preferable for the OCC to continue to analyze how individual state laws impact national banks and to make preemption determinations on a case by case basis rather than adopt a broad general preemption regulation.
In our judgment, the importance of the federal/state relationship mandates that whenever preemption is undertaken other than by congressional action, it should be carefully considered in the context of an individual statute.
Each case should be evaluated on its own particular merits. Overall, ICBA has been and remains concerned that the scope of the OCC rule may not maintain the creative balance that characterizes our unique dual banking system.
In light of the OCCs preemption rulings, the roundtable's petition requests the FDIC to undertake a rule making designed to provide parity between state and national banks and interstate banking.
It seeks to restore equilibrium to preserve the dynamic vitality of the dual banking system and avoid having all banks that operate on an interstate basis to choose the national charter.
ICBA understands the attraction the petition has for multi-state state chartered banks. Allowing them greater ability to operate under the laws of the single state, their home state, would provide uniformity similar to that enjoyed by national banks.
This would foster greater efficiency and certainty in their operations and alleviate some of the pressure to migrate to the national charter. Insuring that larger multi-state state chartered banks can retain their state charters may be critical to preservation of the dual banking system.
If large state chartered banks convert to national charters, will the state system have enough assets to sustain itself? ICBA has grave concerns about whether a state system comprised only of community banks would be viable over the long term.
The petition seeks to expand on the concepts of the Riegle-Neal Interstate Banking and Branching Efficiency Act and fill in the gaps where the law does not provide for host state law preemption.
ICBA questions whether the petition goes too far and whether a regulatory forum is the right one to determine these questions or whether they should be determined in the legislative arena after full public debate.
ICBA is also concerned about a race to the bottom in state supervision and regulation that could be engendered as states clamor to maintain or gain assets under supervision.
Laws and regulations that home states adopt will have extra territorial impact on businesses and consumers in host states. We see the danger for a few states becoming the chartering states of choice for multi-state state charter banks and the potential creation of winner states and loser states.
ICBA also has concerns about the competitive and equities and balance between banks that must adhere to state law and those that do not. Single state state chartered banks would not directly benefit from the rules sought and will be the only institutions operating in their state that are subject to state law.
Now, perhaps this situation is not too different from where we stand today where we have preemption for national banks and Riegle-Neal preemption for out of state banks. Single state state chartered banks discontented with this result can always convert to a national charter.
But, that puts us back where we started with the dual banking system out of balance and further centralization of bank regulation and supervision.
The challenge of maintaining a competitive balance in the dual banking system is a constant one made more difficult in recent years with the concentration of industry assets in institutions of national and regional scope.
It has required periodic reassessment and rebalancing of the playing field from time to time. Well what is the end game of the current path being sought? If preemption is always the solution, are we inexorably marching towards a national banking system only, or a system where all applicable law is federal law and there's no room for state law?
The overarching question that underlines the preemption debate and the roundtable's petition is what law should be applicable to national and state bank activities.
ICBA believes we must widen the debate and dialogue on these issues to find solutions that serve consumers and businesses well, preserve balance in the dual banking system and promote the health and vitality of the banking sector and the nation's economy. ICBA looks forward to participating in this process. Thank you.
MR. KROENER: Thank you. Mrs. Vredevoogd.
MS. VREDEVOOGD: Thank you very much. Good morning. My name is Pat Vredevoogd and I'm First Vice President of the National Association of Realtors. I'll tell you a little bit of my background.
I do sell real estate. I'm a member of the National Association of Realtors and have been a realtor since 1971. I'm a broker owner of AJS Realty and one thing I will tell you as a disclaimer, I'm not an attorney, nor am I a bank regulator, nor am I staff.
So I am a realtor that sells real estate, not perhaps today, but when I get back to Michigan. I appreciate the opportunity to talk to you in person about why the National Association of Realtors believes that the FDIC should deny the petition by the financial services roundtable.
The petition asks the FDIC to issue preemption regulations that would provide that a state bank's home state law governs the interstate activities of insured state banks and their subsidiaries to the same extent that the National Bank Act governs a national bank's interstate business.
Because real estate is local, the issue of preemption of state and local laws applicable to lenders is of great concern to us.
NAR and its members have taken a strong interest in issues relating to competition among federal banks and thrifts, state banks, and non bank financial institutions. Because they play a key role in helping American families buy their homes. I see their importance every day in my business.
Based on this deep seated belief, we oppose the OCC preemption regulations issued in early 2004 because they limit the ability of states and localities to protect their citizens and provide an unfair competitive advantage for national banks.
We have also been an active participant in the joint regulatory proceedings of the Treasury Department and the Fed proposing to permit bank conglomerates to engage in real estate brokerage and management activities.
In our view, these are commercial activities. Treating them, in our view incorrectly, as financial activities would breach the national policy against mixing banking and commerce.
In 1999, Congress reiterated and strengthened this policy in the Gramm-Leach-Bliley Act. This morning, I want to briefly highlight the main reasons we would oppose a regulatory effort to preempt the state laws as the round table has requested.
We believe that the requested preemption would, number one, undermine the ability of states to protect their citizens. Number two, resolve in an undue concentration of banks and fewer choices for consumers.
Number three, open the door to banks becoming involved in commercial activities. Number four, promote weaker consumer protections and bank regulation as states compete for state bank charters. And number five, conflict with and undermine the dual banking system.
So first let me turn to the negative impact on consumer protections that would result if the FDIC were to issue the preemption regulations requested by the roundtable.
The Federal Government should, as a general principle, not restrict states including their local governments from adopting consumer protection policies they determine appropriate for their own citizens.
Of course we all recognize that in some respects, this is closing the barn door after the horse got out. But, we have a federal system and NAR continues to believe that overriding states in these areas should be strictly limited and even then, only after full debate by Congress.
The privacy protections under the GLB Act are a good example of a reasonable compromise. Federal law sets a floor, but states may impose higher standards if they so choose.
The OCC preemption rule is an example of the opposite approach. The federal law is both the floor and the ceiling because states may no longer enforce many local laws against national banks. Contrary to what some of the previous testimony has led us to believe.
NAR believes that FDIC should not take the parallel step for state banks by preempting state laws to prevent state banks to operate just under the laws of their home states.
The effect would be that states, except the state bank's home state, will be unable to enforce their consumer protection policies against either national or state banks.
We can certainly understand the argument in the roundtable's petition that the OCC preemption regulations applicable to both national banks and their operating subsidiaries place state banks at a competitive disadvantage.
Michigan's consumer of financial and insurance services, Linda Waters, submitted a letter confirming the problem. In her letter she explained that OCC caused the problem by issuing overreaching rules. But NAR thinks that the solution is not for the FDIC to follow the OCC lead down the wrong path.
Instead, the answer is for the OCC under new leadership to reconsider its actions or, failing that, for Congress itself to restore the ability of states to enact higher consumer protections.
Consumer Waters said it well, the issues underlying the subject petition by the roundtable are of such broad scope and have such significant implications for the financial services sector that they warrant a more comprehensive review by Congress.
Now I'd like to address the negative impact of the request on consolidation of financial services in the United States. As you know much better than I do, the story of the banking issue in the last several decades has been one of mergers and acquisitions. This trend is likely to continue.
In May of 2004, the Fed staff issued a study cited in our full written statement that analyzed bank mergers from 1994 through 2003. According to the study, most mergers involved acquisitions of small banks that operated in one state by an out of state acquirer that already had a branch in that state.
These acquisitions have lead to growth of interstate banking. NAR believes that if the FDIC were to preempt state laws as requested, it would speed up the decline in the number of financial services providers available to consumers.
We see this happening because preempting state laws will make it easier for state banks to operate nationally. Independent banks in states with stronger consumer protections are likely to find themselves at a competitive disadvantage when competing with out of state banks subject to less burdensome regulation.
Preempting state laws could very well result in independent banks deciding to throw in the towel and resign themselves to the trend by agreeing to merge or be acquired.
Preempting state laws would eliminate competition by reducing the number of choices available to consumers to meet their financial services needs and where there is less competition, higher costs are likely to follow.
Even more importantly, the loss of the hometown banks means consumers are less likely to deal with someone they know, who knows the community and can apply flexible underwriting standards to help more families become homeowners.
Now let me turn to our concern that the rule will open the door to state banks becoming involved in commercial activities. NAR has long been concerned that the OCC's preemption actions will lead to greater authority of national banks to engage in commercial activities.
Despite our nation's long history of avoiding the mixing of banking and commerce, as we see it, under the category of incidental activities, OCC is already permitting national banks to engage in some activities that ordinarily are considered to be commercial.
If this OCC approach is coupled with the preemption requested by the petition, state banks would be permitted to engage in commercial activities permitted by the OCC for national banks, even if host state law does not permit its own state banks to do so.
FDIC preemption would be an integral link in a chain of events that could lead to the steady erosion and ultimate elimination of a separation between banking and commerce. We, of course, believe this should not happen.
But, if there is any debate it should be taken up in Congress. Another of our most significant concerns is that the requested preemption would result in competition by states to entice banks to charter in their states.
If the FDIC proceeds with the preemption regulation, states will recognize that they can attract state banks and the jobs and investment that come with them to relocate in their states by enacting laws that minimize regulatory burden, even if at the expense of consumer protection and safety and soundness.
Banks headquartered in states that take that route will then be permitted to export the lax home state standards to their activities in the other 49 states. While all states will have a strong incentive to respond, it is likely some will be willing to go further than others.
Rather than level the playing field, FDIC preemption would instead disrupt the current structure of supervision at the state level by concentrating state charters in the few states that are willing to set the lowest standards.
Preemption would result in a weaker and less balanced state banking system. The state race to the bottom would also have serious implications for the safety of the Federal Deposit Insurance Fund. FDIC resources would be stretched thin if it cannot rely confidently on a partnership with state bank regulators to help assure safe and sound banking system.
This is not a worst case scenario, it is not unusual to read about a business that is relocating to a state or even to another country where it can operate at a lower cost and with lower standards.
Finally, I'd like to touch on another way that an FDIC preemption regulation would harm the dual banking system. Our written statement reviews the history of the Riegle-Neal Act of 1994 and the 1997 Amendments. Congress clearly intended to balance the decision to permit interstate banking with the authority of states to adopt consumer protections.
The legislative history to both of these statutes reflect concern about how aggressive the OCC preemption and other actions have been. If the FDIC were to preempt state law as the roundtable requests, the result would be a further disruption of the dual banking system because OCC would indirectly have the ability to determine the powers of state banks in host states.
Current law already exempts a branch of a state bank operating in another state from any laws that don't apply to an out of state branch of a national bank. The petition apparently proposes to extend this policy to state banks operating through their operating subsidiaries or through other means.
NAR believes the FDIC should heed the congressional concerns and be sensitive to the adverse consequences the proposed actions could have on the continued viability of the dual banking system.
Again, this is an issue that is better left to the determination of Congress than a regulatory agency. Let's not solve a bad preemption with another bad preemption.
As I conclude my remarks today, let me say that without a doubt the National Association of Realtors would oppose a decision by the FDIC to proceed with preemptive regulations because of the serious adverse consequences that would result.
In view of these consequences which I've gone over, I would just urge you to deny the financial service roundtable's request and again thank you for the opportunity for the National Association of Realtors to present their views. Thank you.
MR. KROENER: Thank you. Mr. Zamorski.
MR. ZAMORSKI: Ms. Thomas, your statement indicates that this is probably not the right forum in which to resolve this complex issue, but there is a sense of urgency if we deny the petition or in fact -- the FDIC to do that. How do you see the debate proceeding since it does have a degree of urgency?
MS. THOMAS: Well, I questioned whether this is the right forum. I didn't say it definitely is not. I think that you raise a good point. There is going to become a point where the situation is urgent and as we know, Congress sometimes takes quite a long time, years in fact to make a decision.
I think having this debate here, this hearing and rule making may be something that in fact intensifies the discussion and the dialogue in order to move the process forward. That's obviously one of your options.
You also have a degree, you can take the whole petition, take none of it, take some of it, deal with it in parts, but I think it is important that we continue to have this discussion.
As I mentioned in my statement, we need to broaden it and widen it and continue the dialogue and bring in other interested parties and see where we can go from here. What we need to find a way to rebalance the dual banking system and so, I'm very supportive of having this dialogue.
MR. ZAMORSKI: Specifically where do you stand on the legislative front if anything?
MS. THOMAS: Well, I mean on a legislative front I think it'll take to the point where the issue has to come to some kind of a head or it's got to have something that really captures the attention of the Congress, to get them to look hard at it and make some decisions.
Once they decide, I mean, they can go either way. They can decide that Riegle-Neal II, the logical extension of that is what's in the conclusion. Or they could decide to rebalance the playing field by rethinking some of the preemption that applies to national banks.
I mean, in my statement I mention a whole question that we're grappling with here is what law should apply, not just to multi-state state charter banks but also national banks and in state banks. It has that constant mixture of federal law that applies, state law that applies.
How do you look at each of the various charters and determine what law will apply to the various charters. So, it's a very complex issue and I think the Congress would have a number of options as does the FDIC with the petition before it. It's really hard to predict where the end game is.
MR. KROENER: Mr. Bovenzi.
MR. BOVENZI: Question for Ms. Vredevoogd. In your statement you said the FDIC doesn't have the authority to interpret the Riegle-Neal Bill, if that's the case, who would have that authority if somebody needs to interpret legislation?
MS. VREDEVOOGD: Well I think that we're of the opinion that Congress has to take another look at it and that that's where it's got to go. It's got to go back there. We have our legal counsel who has put together quite a substantive piece on that and I will make sure that your body gets that.
That will help you with where we come from in really taking a good look at whether the FDIC actually has that legal authority to do. I will -- it will -- it can be here tomorrow for your purview.
MR. BOVENZI: Okay. Thank you. Ms. Thomas, how much of a concern is it about potential competitive inequities for state chartered banks that operate within one state?
It seems most of the new charters are state charters and seem to be doing pretty well and I guess if the FDIC issued some rule making there'd be one set of rules for all banks. How much of a concern is competitive inequity?
MS. THOMAS: Well, it's true what you say. Most of the new charters are state charters. I think they probably are mirroring the industry as a whole for the reasons that I described in my oral statement.
That de novo institutions choose the state charter more often than the national charter. I think I'm trying to look forward though and see where the petition takes us at the end of the day and the bank has to weigh all those considerations when it decides what's the best charter for it.
It's really very individualized decision. It depends on what state they're in, what the laws of that state are and so forth. But I think that there is a concern that at the end of the day, state chartered institutions are the only ones that subject to the law in their state, is that the result that we want.
Will they determine that it may be better for them to flip to a national charter in order to avoid that result. It really depends on what are the laws that are applying, the individual laws and how they impact that thing.
You may have a state where the host state and the home state have very similar laws in terms of consumer protection and so there wouldn't really be a competitive imbalance there.
If you have a situation where the home state and the host state have very different laws that may be a different situation. I think that for the most part, community banks want to deal with their customers fairly.
So it's not a question of their trying to escape consumer protection laws. What they are trying to escape, however, is unnecessary regulatory burden. If they are required to engage in a lot of additional paperwork, disclosures or jump through a lot of additional hoops that either a national bank or an out-of-state state bank doesn't have to jump through, they may decide that it's in their best interest to find another charter where they can avoid some of that regulatory burden.
In fact that's exactly some of the reasons that community banks have supported preemption in individual cases thus far is that it's one mechanism that they see to help avoid unnecessary regulatory burden, which is really on their minds right now, that is the number one concern.
MR. BOVENZI: Okay. Thank you.
MR. KROENER: Mr. Murton.
MR. MURTON: Ms. Vredevoogd, I think someone on an earlier panel said something to the effect that why given that national banks enjoy this preemption that a mortgage broker or people in the mortgage business would obviously choose to affiliate or become acquired by a national bank.
Does your organization worry about that? Do you see that happening? Is that a concern?
MS. VREDEVOOGD: Well, I -- all of it is a consumer protection issue and I think it was the regulator from New York was talking about that. I think one of the things you see is when we look at a national bank and when they've got rules and they can work under different regulations.
It's something that's very difficult when you're working in a local market because you don't -- there's -- sometimes there isn't the consumer protection that you need and it is a big concern. I mean, our job is to sell the American Dream and be able to mortgage it too.
When you're dealing with regulations that aren't compatible, even in your hometown, and some of the things that even are outside of this room are like internet mortgages and things like that, it's making it very difficult for your -- for the first time home buyer or someone who's walking in to buy a house to have the assurance that their mortgage is actually going to close.
So, yes, it is certainly a concern. Especially the mortgage piece of it.
MR. BOVENZI: Ms. Thomas, you mention regulatory burden, you mention this as a concern. Do the community banks that are members of the ICBA, how high up on the list of issues that they worry about is this?
MS. THOMAS: Is this one?
MR. BOVENZI: Yes.
MS. THOMAS: I think they're just beginning to learn about this issue and it's not very high on their list at the moment. As I mentioned, regulatory burden is at the top of their list.
We need to have an ICBA more internal dialogue amongst our members as to what these issues mean for them and where they would like to see the solutions. My suspicion is, and I think it's already been evidenced by some of the comments that you perceived, is that community banks are going to be split on this issue.
There are those community banks that are operating in more than one state or on a state border. They have customers in another state and uniformity of state law would help them in their operations.
Then we have community banks that are only operating in one state and they have some of the concerns that Mr. Bovenzi questioned me about in terms of the competitive equities.
I think you also have differences not only bank to bank, but depending on what state you're in. There are some states where the state banking system is comprised today only of community banks.
So in those states they probably would see that they may have a longer term viability with the state system than a state where some of the -- a significant portion of the state assets under supervision are in larger multi-state state chartered institutions that may have more of an incentive, if you will, to turn to a national charter in order to get uniformity and resolve some of their efficiency questions.
So it's, I think our internal debate needs to continue and we need to undertake that with our bankers to understand where they see that the solutions may lie. But right now they can't see past regulatory burden.
I mean, for example in the -- when you're looking at the issue of preemption, it's hard for them to look past the short term pain, if you will. Preemption is seen by many of them as a solution to a problem. In short, a problem that they're having, an acute problem that they're having.
So to get them to look further into the future and see where the equities should lie and how to achieve the balance is a much more difficult thing.
MR. MURTON: I'd like to have a little follow up on that. So given that your organization is split on this and early in its thinking and as I understood, Mr. Allison is saying is true for his organization and there are several other organizations, banking organizations that aren't even -- didn't even chose to come here suggest they might be in a similar position.
Does that suggest something to you about the timing of our rule making, whether now is the time to do it or later?
MS. THOMAS: I guess timing is a delicate issue. You want to have the full debate and everyone have considered all the issues thoroughly and thoughtfully before you make a final decision on a rule.
On the other hand, we need to act sooner rather than later, I would think, or at least get the dialogue going sooner rather than later so we can look at whether this is a solution, this petition is a solution or what other possible solutions are there. But the timing's a delicate matter.
MR. KROENER: Mrs. Vredevoogd, we heard this morning on the first two panels that under the existing situation, more and more state banks are in fact converting to national bank charters that that has been a recent pattern and that that pattern could continue and there's a competitive imbalance.
Your testimony this morning indicates that if the FDIC were to act favorably on the requested rule there would be a decline and further concentration and reduced number of financial service providers.
I'm not sure both of you can be right. There looks to be a factual difference -- or how do you respond to these experiences in these states that they've shared with us this morning?
MS. VREDEVOOGD: Well maybe -- I guess my thought is that we're sitting here with all of these acquisitions and mergers and with -- if state banks don't have the competitive edge, they're going to get gobbled up and soon we're going to be nation of large conglomerates that don't give people choices.
With no choice, the prices and the costs go up and one of the things about having the state banks and the things that are happening on a local level is -- and one reason why we need to keep them is they've got great innovations.
In my business, we need those. They are bringing us so many new ideas and new programs to try out for the homeowners of the United States that we don't want to lose that. Now, I might have missed your question, so I want to make sure that I answer that question, but my --
MR. KROENER: Well, the implication of the earlier testimony I thought was that there would be greater -- more conversions to national banks, greater concentrations, more mergers and acquisitions. Your testimony is our acting favorable on the rule would have that result.
MS. VREDEVOOGD: Right.
MR. KROENER: So I guess --
MS. VREDEVOOGD: Well I just think it's going to accelerate it.
MR. KROENER: Okay. It will accelerate an existing trend rather than restore a balance.
MS. VREDEVOOGD: Exactly.
MR. KROENER: Okay. Ms. Thomas, how do you see the dialogue moving forward here?
MS. THOMAS: Good question.
MR. KROENER: Maybe. I think Mr. Murton may have asked a variation of that question, but what -- maybe -- we may act on the petition, we can act on all of it, we can act on some of it, we can act on none of it.
I think from your testimony there's a portion of the dialogue that our rule making just really doesn't capture that has to move forward. How does that happen?
MS. THOMAS: I think we need to proceed with addition -- perhaps additional forums such as this particular one in terms of discussing the issues. A way to get the parties together to discuss the issue and identify either this is the right solution or use -- get some creative brainstorming going about what other possible solutions might be.
It may be that the private sector needs to step up the dialogue amongst ourselves. There are many different ways to get the dialogue to keep going. There are -- I know you have some comments from members of Congress on the petition and so the petition will perhaps stimulate some discussion up on the Hill as well.
So I think there's a number of different places that the dialogue can happen and then hopefully come together with some solutions as it moves forward.
MR. KROENER: I guess one of the problems that seems to have developed as we looked at this petition is that within your organization, within Mr. Allison's organizations, with some of the other large trade groups there are actually a variety of views.
There's not a view in that I think inhibits the dialogue. Were there any other questions? We have time for a couple more if people have more questions. No. All right. Thank you very much. We will now recess for a luncheon break and we will reconvene again at 2:00 promptly.
(Whereupon, the above-entitled matter went off the record at 11:55 a.m. and resumed at 2:00 p.m.)