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FDIC Federal Register Citations

BB&T


December 16, 2005

Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS |
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, DC 20429

Re : Proposed Rule: Interstate Banking; Federal Interest Rate Authority - RIN 3064-AC95

Dear Mr. Feldman:

As one of the five largest state-chartered banks in the United States, Branch Banking and Trust Company (BB&T), with branches in twelve states and the District of Columbia, appreciates the opportunity to support and comment on the FDIC’s proposed rule implementing certain provisions of the Petition for Rulemaking filed by the Financial Services Roundtable earlier this year. In general, BB&T supports implementation of the proposed rule as it will help provide state banks with more parity with national banks. Such parity is critical for the future of the dual banking system and for a return to a competitive balance between state and national banks.

Notwithstanding our general support for the proposal, one change to the final rule which BB&T would offer would be to broaden the basis for preemption to include general types of state laws, not merely particular statutes. Riegle-Neal II was enacted because Congress understood that the broad preemption available to interstate national banks was adversely affecting state banks and the dual banking system. Given the OCC's adoption of rules that broadly preempt categories of state law, we suggest that the FDIC’s final rule not in any way result in a more limited preemption.

Additionally, we support the ability of insured state bank subsidiaries to utilize Section 27 of the Federal Deposit Insurance Act to the same extent as Section 85 can be utilized by subsidiaries of national banks. The FDIC's statement that state bank operating subsidiaries can

operate under Section 27 in the same manner and to the same extent as the parent bank is reasonable. However, we request that the FDIC clarify the applicability of Section 27 by providing in proposed 331.3 that an interstate bank that engages in Internet lending may apply the rates of its home state or any state where it has a branch under the standards applicable to interstate lending conducted through a home state or host state office.

In conclusion, with less than one-third of banking assets remaining in state banks, BB&T encourages the FDIC to continue the effort to provide full parity for state banks with national banks. The OCC has given national banks the ability to do business across state lines under a single set of federal rules through federal preemption of state laws that apply to the activities or operations of a bank in a state. However, state banks continue to struggle with uncertainty as to the applicable law governing their interstate banking activities. As a result, state banks are often deterred from profitable business opportunities because of the potential for litigation and enforcement actions that this uncertainty creates. Therefore, we submit that the FDIC implement the present proposal, and then immediately begin to address the other matters suggested in the Financial Services Roundtable’s Petition.

Thank you for the opportunity to provide comments on this issue of critical importance to state banks.

Sincerely,

Kathleen A. Kordek
Senior Vice President and Associate General Counsel

 


Last Updated 12/16/2005 Regs@fdic.gov

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