THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, May 22, 1996 TAG: 9605220148
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: 47 lines
Responding to the spread of interstate banking, Virginia's Bureau of Financial Institutions has agreed to a streamlined system for supervising state-chartered banks that do business in more than one state.
The new arrangement provides a framework for jointly supervising banks rather than requiring them to deal with regulators wherever they have branches, Sidney A. Bailey, commissioner of the the state agency, said Tuesday.
The regulator in a bank's home state will be the primary contact with responsibility for supervising the institution's safety and soundness, Bailey said. Regulators in other states where the bank operates will oversee such matters as antitrust and deposit-concentration limits, community reinvestment, consumer protection and fair lending.
This arrangement was devised by a task force of the Conference of State Bank Supervisors and approved by the organization's 50 members earlier this month, said Bailey, a task-force member.
Without a simpler regulatorysystem, state-chartered banks operating in several states would have been forced to convert to nationally chartered banks to avoid added regulatory expenses, Bailey said.
Congress voted in 1994 to allow banks to open branches throughout the country without having to maintain a separate bank in each state. Interstate branching became available in Virginia banks last July.
Those banks with national charters were less affected because they are supervised by a single regulator, the Office of the Comptroller of the Currency, an arm of the U.S. Treasury Department.
Virginia's Bureau of Financial Institutions tackled the problem of overlapping state regulation last December by reaching a joint supervisory agreement with banking regulators in Maryland, Pennsylvania and Delaware.
Banking regulators in Washington, D.C., North Carolina and West Virginia have expressed interest in joining this agreement, Bailey said.
Providing state-chartered banks with a primary regulator has allayed concerns among state-chartered banks in Virginia that they would have to report to regulators in several states.
``It's going to mean less time attending to the examiners' needs and having more time to spend with customers,'' said Jay Spruill, general counsel of the Virginia Bankers Association in Richmond. by CNB