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FDIC Federal Register Citations


Muldoon Murphy Faucette & Aguggia LLP

May 3, 2004


Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, D.C. 20429

Re: Proposed Rulemaking: Filing Procedures Affiliate Transactions, 69 Federal Register 12571, RIN 3064-AC78 (March 17, 2004)

Dear Mr. Feldman:

This law firm emphasizes the representation of depository institutions before the federal and state regulatory agencies. As such, the firm represents numerous nonmember state banks that would be subject to the referenced proposed rule regarding Sections 23A and 23B of the Federal Reserve Act, if finalized, and it is in this context that we offer our comments.

The proposed rule would adopt language incorporating by reference the Federal Reserve Board's Regulation W, 12 C.F.R. Part 223, and would apply Regulation W to nonmember banks in the same manner and to the same extent as if they were member banks of the Federal Reserve System. The proposed rule would, however, establish the FDIC, rather than the Federal Reserve Board, as the appropriate agency to rule on exemption requests and hearings involving the exercise of a controlling influence affecting nonmember banks.

The preamble to the proposed rule notes that the Federal Reserve Board has previously been the agency that was viewed as having responsibility for ruling on exceptions and conducting control influence hearings, including with respect to nonmember banks. We have no particular preference as to which agency handles these matters. However, although the preamble notes that the Federal Reserve has consulted with the FDIC in the past regarding individual exemption requests by nonmember banks, we are concerned that there is no indication that the Federal Reserve Board has agreed with the approach suggested in the FDIC's proposed rule. If would be extremely unfortunate if the FDIC finalized the proposed rule but the Federal Reserve Board interpreted Section 23A to require it to act on these matters rather than the institution's primary federal regulator. Nonmember banks would then be faced with the prospect of duplicative filing requirements with multiple agencies, and even with the possibility of contradicting rulings. This would cause considerable confusion and unnecessarily increase the regulatory burden on nonmember banks.

We also note that the Office of Thrift Supervision ("OTS") apparently did not take a approach similar to that of the FDIC in amending its regulations to incorporate Regulation W, at least as to exception requests. 68 Federal Register 57790 (October 7, 2003). Again, while we have no particular preference as to whether the individual agencies handle these matters as to their constituent institutions or whether the Federal Reserve Board does so for all institutions, we believe that it is in the best interests of all insured banks and savings associations that the FDIC, Federal Reserve, OTS and Office of the Comptroller of the Currency adopt a coordinated approach regarding exemption requests and control influence hearings. As such, we suggest that the FDIC not adopt its proposed procedures regarding exception requests and control influence hearings without ensuring agreement among the agencies on a uniform approach.

Thank you for the opportunity to provide this comment.

Very truly yours,
MULDOON MURPHY FAUCETTE & AGUGGIA LLP

Joseph P. Daly


 

 

 

Last Updated 05/12/2004 regs@fdic.gov

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