Federal Deposit
Insurance Corporation

Mr. Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, N.W.,

Washington, DC 20429

E-mail: comments@FDIC.gov

RE: Interstate Banking; Federal Interest Rate Authority

Dear Mr. Feldman:

The Wisconsin Bankers Association (WBA) is the largest financial institution trade association in Wisconsin, representing 310 state and nationally chartered banks, savings and loan associations, and savings banks located in communities throughout the state. WBA appreciates the opportunity to comment on the notice of proposed rulemaking to preempt certain state laws with the stated purpose of establishing parity between national banks and state-chartered banks in interstate activities and operations.

WBA has long supported the United States’ dual banking system. Specifically, WBA supports the efforts set forth in this proposed rule to provide parity with national banks whereby a state bank’s home state law can govern the interstate activities of state banks to the same extent that the National Bank Act governs a national bank’s interstate business. While WBA is generally in support of the proposal, WBA offers the following comments.

Section 24(j) Branch activities.

Banking in today’s modernized world allows for many banking services and operations to be conducted at facilities that are not branches. The proposed definition of “activity conducted at a branch,” to mean “an activity of, by, through, in, from, or substantially involving a branch” fails to clearly identify those activities of a state bank in a state where the bank does not have a branch. If Congressional intent is to grant state banks full parity with national banks, the proposal unfortunately leaves a gap regarding banking activities conducted by a state bank in a state where the bank does not have a branch. WBA believes FDIC should clarify this matter.

Section 27 List.

The proposal suggests the creation of a list of states and jurisdictions that have “opted out” of the coverage of section 27. WBA does not believe that this list should be included in the rule because, simply put, the list could change. If included, continual amendments and announcements of such changes would need to be made to the rule resulting in additional and unnecessary administrative burden.

Secondly, and of great importance, please note that Wisconsin repealed, in 1997 Wisconsin Act 142, its opt-out of the Depository Institutions Deregulation and Monetary Control Act (DIDMCA). The link to the 1997 Wisconsin Act is: http://www.legis.state.wi.us/1997/data/acts/97Act142.pdf. The change went into effect in May, 1998. WBA respectfully requests FDIC make a correction to its statements found in the preamble of the Proposed Rule stating that Wisconsin has not repealed its opt-out of the DIDMCA.

Written Opinions on Preemption.

As currently proposed, in order for a state bank to rely on national bank preemption, the state bank is required to obtain a written opinion from either OCC or a court. The written opinion must determine that a state-specific law is preempted. This concerns WBA because state banks would be forced to await a written response, which may not be timely, as OCC would likely be inundated with requests for preemption opinions from most state-chartered banks. Furthermore, since OCC is not required to respond to these requests, the state bank may be forced to spend additional money in the effort to obtain declaratory judgment from the court. If, however, state banks were afforded the same opportunity as national banks, to obtain an opinion from legal counsel that the state statute is preempted based upon OCC’s rules and past findings, the fairness of full parity with national banks would be more closely accomplished. WBA requests FDIC amend the proposed rule to streamline preemption determinations for state banks.

Conclusion.

WBA recognizes that this rulemaking proposal would bring state banks greater efficiency, greater certainty, and greater clarity in determining which law is applicable to the interstate activities and operations of state-chartered banks with a branch located outside of the bank’s home state; at the same time the proposed rule will preserve state law to the extent that state law is not preempted by federal law. Nonetheless, WBA requests FDIC amend the proposed rule in accordance with the above comments. Once again, the WBA appreciates the opportunity to comment on the notice of proposed rulemaking.

Sincerely,

Kurt R. Bauer
President/CEO