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FDIC Federal Register Citations

July 12, 2001

Robert E. Feldman
Executive Secretary
Attention: Comments/OES
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

Re: Notice of Proposed Rulemaking, Being Engaged in the Business of Receiving Deposits other than Trust Funds (12 CFR Part 303)

Dear Mr. Feldman:

It has come to my attention that the FDIC is attempting to promulgate a regulation at 12 CFR Part 303. This letter is to express my opposition to the adoption of this proposed regulation at this time.

The proposed regulation appears to intervene with the Heaton v. Monogram litigation pending in Louisiana. Such intervention in this ongoing litigation seems inappropriate under these circumstances.

For example, I am troubled by the fact that the FDIC is seeking to adopt in the regulation a previously issued general counsel opinion, the reasoning of which has already been rejected by a federal judge.

Similarly, I am quite concerned with the timing of the regulation. I understand the FDIC has taken an appeal in the Heaton litigation to the United States Fifth Circuit and that the appeal is pending. It raises questions regarding appropriate discretion for the Corporation to try to promulgate the regulation and then use it to bolster the agency's litigating position.

Adding to my concern, is that the regulation appears to bias the outcome of the litigation toward one party. Some personnel within the FDIC seem to be involved in advocacy rather than governance, and what is more, that advocacy comes at the detriment of my constituents. I know my concerns regarding the agency's conduct are shared by the federal and state judges involved in the case, along with the Louisiana Attorney General.

Accordingly, I believe the proper and appropriate approach would be for the FDIC to hold in abeyance the proposed regulation until the Heaton v. Monogram matter is finally concluded. In this fashion, the FDIC will avoid the appearance of impropriety and bias, while allowing the court system to resolve the case.

Please feel free to contact my office should you wish to discuss this matter further.

Mary L. Landrieu
United States Senator
Last Updated 07/17/2001

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