Executive Summary of the Testimony of Mr. John Presley and M&I Marshall & Ilsley Bank to the FDIC Regarding the Petition for Rulemaking to Provide Interstate Parity for State Banks
May 24, 2005
Mr. Presley is Senior Vice President and Chief Financial Officer of Marshall & Ilsley Corporation. M&I Marshall & Ilsley Bank is the lead bank of the corporation. The corporation and the bank are both headquartered in Milwaukee, Wisconsin. The corporation has assets of over $41 billion, and the bank has assets of approximately $35 billion. The bank is the largest bank headquartered in Wisconsin, and has been regulated as a Wisconsin state chartered bank since 1888 by the Wisconsin Department of Financial Institutions and its predecessor agencies. The bank operates interstate branches in Minnesota and Arizona and delivers products to customers on a nationwide basis.
On behalf of the bank, Mr. Presley will be testifying in favor of the Petition. Following a description of the bank's history as a Wisconsin state chartered bank, Mr. Presley will describe the bank's business today and the complexities of delivering its products on a multi-state basis. These complexities stem from the many differing state laws that the bank must comply with. This burden is compounded by the fact that the bank's national bank and federal thrift competitors may instead use a uniform platform resulting from federal preemption of these same state laws.
Mr. Presley will also describe the benefits of the dual banking system, such as innovations in banking regulation that happen at the state level. These benefits will decrease dramatically as state chartered banks that wish to compete on an interstate basis on equal footing with federal thrifts and national banks continue to find that they must become federal thrifts and national banks in order to so. Mr. Presley will also cite legislative history from the 1997 amendments to the Riegle-Neal Act that indicate that this precise result was feared by Congress, and that Congress intended the Act to preserve the dual banking system.
Mr. Presley will conclude by stating that, unless the FDIC promulgates the rules requested by the Petition, state chartered banks seeking to compete on an interstate basis will be sent the message that they must leave their state charters and obtain federal charters in order to do so.