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Press Release
Statement of New York Superintendent of Banks Richard H. Neiman
Passage of the Hutchison-Klobuchar Amendment Demonstrates Importance of Supervisory Partnership between the States and Federal Government

May 12, 2010

New York, N.Y.: “The United States Senate today demonstrated our nation’s commitment to maintaining the partnership between the states and the federal government in supervising our banking system.  The passed Hutchison-Klobuchar amendment ensures that large state-chartered banks will not convert to a national charter simply to avoid supervision by a third regulator.  Incentivizing such charter shopping would not only have undermined the spirit of reform, it would have undermined the dual banking system that has fueled our community banks and financial prosperity since the 19th century.”

“Until this morning the Senate financial reform bill contained a provision to transfer the supervision of all state banks that are members of the Federal Reserve System from the Federal Reserve (Fed) to the FDIC, while leaving the very largest bank holding companies under Fed supervision.  Large state member banks would have gone from having two regulators as they do now (the State and the Fed) to having three regulators (the State, the Fed, and the FDIC).  The unintended effect would have been charter flipping, whereby large state member banks switch to a federal charter in order to be supervised by only two regulators (OCC and the Fed).”
 
“With the bill that has been put forth and this morning’s passed amendment, Congress is passing the reform we need.  We in the states are now looking to the Senate for the leadership and courage to ensure that the bill’s consumer protections are not weakened.  The provisions that allow states to adopt and enforce consumer protections against national banks – without being preempted – must stand.”

The New York State Banking Department is the regulator for all state-chartered banking institutions, virtually all of the United States offices of international banking institutions, all of the State’s mortgage brokers, mortgage bankers, check cashers, money transmitters and budget planners. The aggregate assets of the depository institutions supervised by the Banking Department are more than $2.4 trillion.

In addition to regulating banking institutions, the Banking Department is active in informing and educating all New Yorkers on banking matters. To contact the Banking Department, please call 1-877-BANK-NYS or visit our Web site at www.dfs.ny.gov.

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