FDIC REDUCES BURDEN OF MANAGEMENT INTERLOCKS REGULATIONS
FOR IMMEDIATE RELEASE PR-52-96 (7-16-96)
Media Contact: Robert M. Garsson (202-898-6993)
The FDIC Board today agreed to reduce burdensome aspects
of rules that limit the ability of bankers to work for two
competing institutions at the same time.
By law, so-called "management interlocks" generally are
prohibited because of concerns about potential anticompetitive
effects. However, the agencies have limited authority to grant
exceptions to the ban on interlocks.
Under current interagency rules, for example, an officer of
one banking institution can perform similar duties for an unaffiliated
institution in a different community in the same metropolitan area
provided that both institutions have less than $20 million in assets.
But under rules approved today, this management interlock would
be permitted if just one of the institutions has assets of less than
$20 million. The change is expected to reduce regulatory burden and
enhance competition by expanding the ability of smaller institutions
to attract talented new managers.
The revised regulations encompass a variety of changes to
interlocks rules mandated by a 1994 law. Similar revisions were
adopted by the Federal Reserve Board on July 10, and are being
considered by the Office of the Comptroller of the Currency and the
Office of Thrift Supervision.
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Congress created the Federal Deposit Insurance Corporation in 1933 to
restore public confidence in the nation's banking system. The FDIC
insures deposits at the nation's 12,000 banks and savings associations
and it promotes the safety and soundness of these institutions by
identifying, monitoring and addressing risks to which they are exposed.
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