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Each depositor insured to at least $250,000 per insured bank

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FDIC Federal Register Citations

Conference of State Bank Supervisors

July 9, 2004

Robert E. Feldman
Executive Secretary
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, D.C. 20429

Attention: Comments 12 CFR Parts 303 and 324

Thank you for the opportunity to provide comments in response to the FDIC’s proposal to amend title 12 of the Code of Federal Regulations to cross reference Regulation W in order to make it clear that insured state nonmember banks are subject to the restrictions and limitations and may take advantage of the exemptions contained in Regulation W. Through the proposal, the FDIC also notes that insured state nonmember banks are subject to the restrictions and limitations that govern transactions between member banks and their affiliates found in sections 23A and 23B of the Federal Reserve Act in the same manner and to the same extent (emphasis added) as though they were member banks.

To provide non member banks with additional guidance in this area, the FDIC also proposes to clarify that the FDIC administers the restrictions and limitations contained in Regulation W as this rule applies to insured non member banks, that the FDIC may grant case-by-case exemptions from those restrictions and limitations and that the FDIC is the appropriate agency to make other determinations under Regulation W. Additionally, the FDIC has proposed to amend part 303 of the agency’s regulations by adding a new section that would govern requests for exemptions from new part 324 as well as hearings that are held to determine whether a shareholder or company exercises a controlling influence over another company.

As the banking industry continues to serve its customers by providing products and services in coordination with or through one or more of their affiliates, clear guidance in this area is essential. As the federal banking agencies address this matter, including the resolution of issues that may require interagency coordination relative to Regulation W, CSBS as the professional organization of the nation’s state banking agencies would be happy to provide assistance or information that might be helpful.

Best personal regards,

President and CEO
Neil Milner

Last Updated 07/14/2004

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