Federal Deposit
Insurance Corporation

North Carolina Bankers Association
P.O. Box 19999
Raleigh, NC 27619-1999

Mr. Robert D. Feldman
Executive Secretary
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429-0002

VIA E-MAIL: comments@fdic.gov

Re: Insurance of State Banks Chartered as Limited Liability Companies

Dear Mr. Feldman:

The FDIC has requested comment with respect to insurance of deposits held by state banks chartered as limited liability companies under state law. The North Carolina Bankers Association (NCBA), on behalf of its 135 member banks and savings institutions, is pleased offer the following comments in response to the agency's request.

The NCBA supports the adoption of a rule that permits state banks chartered as limited liability companies to obtain federal deposit insurance. The choice of a limited liability company as a form of business entity is recognized by all states and one that is subject to statutory and regulatory requirements equal to those applicable to the traditional corporate form. Although the characteristics of limited liability companies may vary among states, they do so no less than those of other corporate forms. A bank chartered as a limited liability company would be subject to the same state and federal legal and regulatory supervisory requirements, including most prominently safety and soundness, as one chartered in the traditional corporate form.

The FDIC invites comment concerning whether its interpretation of the term "incorporated", for purposes of determining eligibility for deposit insurance coverage, should utilize some, all, or none of four traditional corporate attributes (perpetual succession, centralized management, limited liability, and free transferability of ownership interests). Since one or more of such attributes are characteristic of limited liability companies in most, if not all, states, it is suggested that the FDIC's interpretation of the term "incorporated" be founded simply on the statutory recognition of the limited liability company form, rather than on the individual attributes. In other words, permit deposit insurance coverage if a bank is duly chartered as a limited liability company pursuant to state law.

The North Carolina Bankers Association believes that permitting banks chartered as limited liability companies to obtain deposit insurance broadens bank ownership options in a positive manner. We urge that a rule consistent with these comments be adopted soon.