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FDIC Federal Register Citations

World's Foremost Bank
Robert E. Feldman, Executive Secretary   
Comments/Legal ESS
Room 360

Federal Deposit Insurance Corporation

550 17th St NW

Washington, DC 20429

Re: Petition for Rulemaking to Preempt Certain State Laws

Dear Mr. Feldman:

World's Foremost Bank ("WFB") is a Nebraska state-chartered bank located in Sidney, Nebraska that is primarily engaged in interstate credit card lending. WFB appreciates the opportunity to comment on the FDIC's Petition for Rulemaking to Preempt Certain State Laws.

WFB supports the Financial Services Roundtable's petition for rulemaking to preempt certain state laws. We believe that consumers are best served by the dual-banking system of national and state banks, and that the FDIC has the authority to make rules to ensure parity between state-chartered banks and national banks in interstate activities and operations. Consumers, state banks, and the dual-banking system in general would benefit if FDIC-insured state banks were governed by a single framework of law and regulation to the same extent as national banks.

While WFB does not have branches in states other than Nebraska (we have customers in all 50 states), we are supportive of the petition's argument that the FDIC should adopt rules to provide that the home state law of a state bank will apply to its activities in other states to the same extent as the National Bank Act ("NBA") applies to the activities of national banks. We believe that Congress intended to ensure parity between state banks and national banks through enactment of the Riegle-Neal Amendments Act of 1997 and section 104(d) of the Gramm-Leach-Bliley Act.

Currently, we believe that there is uncertainty regarding which state laws apply to state banks that operate on an interstate basis. This uncertainty may lead to lost opportunities for state banks and consumers, due to fears of potential litigation or enforcement actions. Federally chartered institutions do not have the same concerns; the precedent of national preemption of state laws has led to national banks and thrifts operating under a single set of federal rules. State banks are at a competitive disadvantage compared to national banks, and this disparity could weaken the state charter and the dual-banking system.
WFB believes that the FDIC has the authority to make rules to address this uncertainty and provide state banks with the ability to stay competitive with national banks in interstate operations. The FDI Act permits the FDIC to implement rules to enforce existing laws, such as the Riegle-Neal Amendments of 1997 and the Gramm-Leach-Bliley Act. Absent any express rulemaking and clarification by the FDIC, state-chartered institutions do not benefit from the protections Congress intended.

We support the Roundtable's position that rulemaking to ensure state banks can operate on a level playing field similar to national banks will promote the safety and soundness of state banks. In addition, rulemaking to clarify these questions will aid the FDIC and state banking departments with regulation and enforcement action.

By expressly addressing the preemption of certain state laws for state-chartered banks engaged in interstate operations through rulemaking, the FDIC will improve the quality of the state charter. Doing so will ensure that state-chartered institutions are not at a competitive disadvantage from a lack of a single framework of rules and regulations. Ultimately, this rulemaking would benefit the dual-banking system and have positive effects for state-chartered institutions and their customers.

David A. Roehr President/CEO
World's Foremost Bank

Last Updated 05/10/2005

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