FOR IMMEDIATE RELEASE: May 21, 1996

Commissioner Patrick M. McQueen, on behalf of the Michigan Financial Institutions Bureau, has endorsed two documents that will improve supervision and reduce regulatory burden for state-chartered banks that operate across state lines. At the Annual Meeting of the Conference of State Bank Supervisors earlier this month, Commissioner McQueen joined his colleagues in approving the Framework for a Cooperative Agreement, among state banking departments, and a State-Federal Supervisory Protocol, among state banking departments, the Federal Deposit Insurance Corporation and the Federal Reserve System, for the supervision of multi-state banks.

The Framework for a Cooperative Agreement outlines procedures for state banking departments to coordinate the supervision of multi-state, state-chartered banks. Building on the Framework, state banking departments will promote and evaluate the safety and soundness of banks operating within their borders by supervising and examining multi-state banks in cooperation with each other. Supervisory burden to these banks will be reduced by better coordination and communication, thus facilitating the examination process; and the responsiveness to local needs and interests in an interstate banking and branching environment will be enhanced.

The Framework is a model for individual states to tailor their own agreements on the roles of home states (where the bank is headquartered) and host states (where the bank has branches) in the supervision of multi-stato, state-chartered banks. Under the Framework, the home state supervisor will be the primary regulator and provide a single point of contact for the institution. Host state law will apply to out-of-state branches in the areas of anti-trust and deposit concentration limits, community reinvestment, consumer protection, and fair lending.

The State-Federal Supervisory Protocol establishes guidelines for state supervisors, the FDIC and the Federal Reserve to share supervisory responsibilities among the states and the Federal banking agency that supervises a multi-state bank.

"These documents demonstrate the continued vitality of state bank supervision," Commissioner McQueen said in a statement today. "My colleagues and I, all around the country, are committed to ensuring that state regulation remains responsive and effective, not obstructive. Through these agreements, we will retain the benefits of state bank supervision for our citizens and for our banks that want to operate across state lines."