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Press Release
New York, New Jersey and Pennsylvania Sign Tri-State Banking Pact

April 15, 2008

JERSEY CITY/NEW YORK CITY – Banking officials from Pennsylvania, New York and New Jersey today signed a compact that will allow banks in those three states to expand across state lines and be regulated only by their home state regulator.

The compact, an agreement which will strengthen the state chartered banking system and the financial services industry in the greater New York Metropolitan Region, was signed in ceremonies today in Jersey City and New York City.

“This agreement strengthens and streamlines our states’ regulation of banks and financial institutions, and will enhance banks’ abilities to expand across state lines,” said New Jersey Department of Banking and Insurance (DOBI) Commissioner Steven M. Goldman. “This is a very positive action for consumers and banks in New Jersey, New York and Pennsylvania.”

Under provisions of the agreement, banks in these three states that open branches or expand into states participating in the compact, will operate under their home state’s laws and regulatory oversight.  For example, a Pennsylvania bank can expand into New Jersey or New York and be subject only to Pennsylvania banking laws.

Previously, banks expanding across state lines were either subject to regulations in the host state or had the option to relinquish their state charter in favor of federal charters which are more costly and can be less restrictive.

“This compact makes it easier for each of us to help our own citizens,” said Pennsylvania Secretary of Banking Steve Kaplan. “Clearly, when Pennsylvania, New York and New Jersey consumers have issues with out-of-state banks, each of us wants to know about it. And, more importantly, we want to have a say in how issues are handled and ensure that they’re quickly resolved.”

The agreement also allows state chartered banks to grow across state lines while preserving the vitality of the dual banking system.

“This compact builds parity between state and national banks,” said New York Superintendent of Banks Richard H. Neiman. “This is a significant step in retaining a competitive balance, which is the foundation of the dual banking system.”

Bankers Associations expressed strong support for the agreement.

“The New York Bankers Association strongly supports initiatives which will enhance the state banking charter and harmonize state regulation to reduce uncertainty and unnecessary regulatory duplication. We applaud the announcement today and the leadership of New York, New Jersey and Pennsylvania,” said Michael P. Smith, President & CEO of the New York Bankers Association, which represents independent, thrift, community, regional and money center banks throughout New York State, with combined assets of more than $9 trillion and more than 300,000 employees.

"The New Jersey banking community applauds this tri-state agreement that will streamline the regulatory process for institutions wishing to expand beyond their state borders. Having one state regulator will simplify regulatory compliance for banks with offices in more than one state, reduce compliance costs and enhance the state charter while giving New Jersey banks a better opportunity to serve customers in New York and Pennsylvania,” said a statement issued jointly by John McWeeney president of  the  New Jersey Bankers Association and James Silkensen, president of the New Jersey League of Community Bankers  

The signing was made up of two events. The first event took place at the historic corporate offices of The Provident Bank in Jersey City. The Provident is New Jersey’s oldest and largest state chartered bank.

Two hours later,  the compact was signed again in an event sponsored by the New York State Banking Department at the Museum of American Finance, which is located in the former Bank of New York headquarters building. The Bank of New York was founded by Alexander Hamilton in 1784, making it the first state bank in New York and the oldest existing bank in the United States. The event was held in the room that was once Alexander Hamilton’s office.

Regional Interstate Branching Compact

Department of Financial Services


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