Washington, D.C. – Today, Congressman Frank Lucas (R-OK) and Congressman Denny Heck (D-WA) joined US Senator Orrin Hatch (R-UT) and Senator Mazie Hirono (D-HI) to introduce the State Regulatory Representation Clarification Act (H.R.3915/ S.1910). The legislation clarifies the requirement for the Federal Deposit Insurance Corporation (FDIC) Board of Directors to include at least one individual who has served as a state bank supervisor.
“The folks in charge of overseeing our local credit markets and banks should be responsive to the specific needs and challenges of our local communities,” Representative Lucas said. “I’m proud to support this bill because it enhances state regulatory input by ensuring the FDIC Board reflects the perspective and experience of state bank supervisors.”
“In my first four years on the Financial Services Committee, nobody taught me more about the work of the committee than our Director of Washington’s Department of Financial Institutions, Scott Jarvis,” Representative Heck said. “I am not the only one who has seen the value of people like Scott, which is why this requirement was first implemented 20 years ago, and I am proud to support this clarifying bill today.”
“State bank supervisors understand local credit markets and comprehend the vital role banks play in individual communities,” Senator Hatch said. “With the recent growth in the number of state chartered banks, it is critical a state bank supervisor is on the FDIC Board to contribute their unique expertise and viewpoints. Our legislation gives state bank supervisors a seat at the table to ensure that the voices of local communities are heard.”
“As the FDIC administers federal policies, it’s important to have voices at the table who understand local communities and the banks that serve them are very different than big banks on Wall Street,” Senator Hirono said. “State bank supervisors have this important perspective, and the bipartisan bill that Senator Hatch and I are introducing today will ensure that the FDIC board has this necessary perspective in place when making and implementing policies that impact community banks.”
Statements of Support
“State regulators charter and supervise 78 percent of all U.S. banks, and we bring a local perspective on how credit and banking services affect individual communities. In 1996, Congress recognized this unique perspective by mandating that the FDIC Board of Directors include such representation,” John Ryan, President and Chief Executive Officer of the Conference of State Bank Supervisors, said, “In recent years, this requirement has been improperly interpreted. The bipartisan, bicameral State Regulatory Representation Clarification Act, which we strongly support, reinforces Congress’ original intent: the FDIC Board must include a state bank regulator. Period.”
The State Regulatory Representation Clarification Act would clarify the need for at least one member of the FDIC Board of Directors to have “served as a state bank supervisor.” While the Economic Growth and Regulatory Paperwork Reduction Act of 1995 required that the FDIC Board include at least one director with “state bank supervisory experience,” the definition remains excessively vague and broadly applied.