Banking and Finance Law Daily Wrap Up, DIRECTORS, OFFICERS AND EMPLOYERS—FDIC Board must include member with state regulatory experience: CSBS, (Feb 1, 2022)

By Charles A. Menke, J.D.

In a letter to Senate leadership, the organization called for the nomination and confirmation of a state bank commissioner to serve on the FDIC Board.

The Conference of State Bank Supervisors (CSBS) has written to Sens. Chuck Schumer (D-NY) and Mitch McConnell (D-Ky), “ask[ing] that Congress uphold its commitment to the dual banking system” as required by federal law.” According to the organization, the Federal Deposit Insurance Act (FDI Act) requires that one FDIC Board member have state bank supervisory experience. “[T]he letter and the spirit of the law, as well as its legislative history, all indicate that this requirement is only met by a person who has worked in state government as a supervisor of state-chartered banks,” the letter said.

A CSBS blog post expounded on the requirements of the FDI Act and the nomination process, emphasizing the following three points:

1. The FDI Act’s legislative history demonstrates Congress’s clear intent to include on the FDIC board an individual with state government experience supervising state banks.

2. Experience working for the FDIC or the Federal Reserve System does not meet the FDI Act’s requirement of an independent director with “state bank supervisory experience.”

3. Other FDI Act provisions regarding state bank supervision reinforce that “state bank supervisory experience” clearly refers only to service as a state government official with bank supervisory responsibilities.

“Because the Comptroller of the Currency’s seat on the Board represents the national banking system, Congress wanted to ensure a state bank commissioner would also serve on the FDIC Board to provide the state banking system’s perspective,” the letter said. The CSBS further noted, however, that the FDIC Board has not included anyone with state regulatory experience since Massachusetts State Bank Commissioner Thomas Curry in 2012, and therefore has failed to comply with the FDI Act requirements for nine years. The CSBS believes the current FDIC Board vacancies provide an opportunity to fulfill the FDI Act’s obligations, adding that “[t]he FDIC Board would benefit tremendously from state regulators’ practical, real-life experience with innovation.”

Companies: Conference of State Bank Supervisors

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