2010 Washington Fly-In R E GULATORY REFORM UPDATE Buz Gorman Margaret Liu John Ryan March 22-23, 2010

2010 Washington Fly-In


RREEGULATORY REFORM GULATORY REFORM

UPDATEUPDATE

Buz GormanBuz GormanMargaret LiuMargaret Liu

John RyanJohn Ryan

March 22-23, 2010March 22-23, 2010



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Percentage of Charters by Authority

As of 12/31/2009

9% OTS

18% OCC



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Numbers of Charters by Authority

STATE % OCC % OTS % TOTALS Change

12/31/2009 5,855 73% 1,465 18% 701 9% 8,021 -293

12/31/2008 6,034 73% 1,540 19% 740 9% 8,314 -393

12/31/2006 6,216 71% 1,723 20% 768 9% 8,707 -1,046

12/31/2000 6,607 68% 2,231 23% 915 9% 9,753 -1,952

12/31/1995 7,676 66% 2,858 24% 1,171 10% 11,705 -1,662

12/31/1992 8,388 63% 3,593 27% 1,386 10% 13,367



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M&A Deals SummaryM&A Deals Summary



Announced Bank M&A TransactionsAnnounced Bank M&A Transactions


2010 Washington Fly-InBank M&A Transactions Currently Bank M&A Transactions Currently PendingPending



Completed Bank M&A TransactionsCompleted Bank M&A Transactions



Terminated Bank M&A TransactionsTerminated Bank M&A Transactions



Capital Offerings SummaryCapital Offerings Summary



Announced Bank Capital OfferingsAnnounced Bank Capital Offerings



Pending Bank Capital OfferingsPending Bank Capital Offerings



HouseHouse• Wall Street Reform and Consumer Protection Act of

2009• Approved by House 223 to 202

SenateSenate• Latest Dodd Bill released last Monday• Over 1,300 pages• Mark-Up begins Monday afternoon• Chairman Dodd’s Goal: report out before the end of

this week

Financial Regulatory ReformFinancial Regulatory Reform


2010 Washington Fly-InFinancial Stability and Prudential SupervisionFinancial Stability and Prudential Supervision

HouseHouse • Combines OCC and OTS• No change to FDIC safety and soundness

responsibilities over state-chartered banks

SenateSenate • Eliminates thrift charter; eliminates OTS• Fed oversees (and assesses exam fees

on)• All bank and thrift holding companies

above $50 billion• Non-bank financial holding companies

identified as systemically significant



SenateSenate(cont’d)(cont’d)

• Fed loses supervisory responsibility for state-member banks

• Fed retains rulemaking authority for state-member banks

• FDIC becomes primary federal regulator for:• All state-chartered banks• State bank holding companies $50 billion

and under



SenateSenate(cont’d)(cont’d)

• OCC gains supervisory authority over:• Federal thrifts• Non-bank affiliates• National bank and thrift holding

companies $50 billion and under• State and National Bank “Exam Fee Parity” -

OCC to propose to FDIC an amount to be transferred to subsidize OCC’s supervision of depositories at or below $50 billion



HouseHouse • Creates Financial Stability Oversight Council (“FSOC”)

• Includes a state banking commissioner as a non-voting member

SenateSenate • Creates Financial Stability Oversight Council (“FSOC”)

• No state banking commissioner representation on FSOC

• Establishes Office of Financial Research in Treasury and supporting FSOC



HouseHouse • Provides for emergency stabilization for systemically significant firms in receivership

• TARP-like authority to support solvent institutions outside of resolution process

Financial Stability and Prudential SupervisionFinancial Stability and Prudential Supervision

SenateSenate • Does not contain similar provisions



HouseHouse • Exercise of Fed’s section 13(3) authority must be “broadly available” and requires Treasury concurrence


SenateSenate • Fed’s section 13(3) authority limited to systemically significant industry utilities or broad-based programs

• Fed, in consultation with Treasury, to develop emergency lending policies and procedures



HouseHouse • Requires 2/3 vote of the Fed and FDIC plus written determination by Treasury

• FDIC is receiver


SenateSenate • Requires 2/3 vote of Fed and FDIC• Requires finding by 3-judge special

bankruptcy panel that firm is in default or in danger of default

• FDIC is receiver



HouseHouse • Pre-funded up to $150 billion by assessments on companies with at least $50 billion in assets


SenateSenate • Pre-funded up to $50 billion by assessments on companies with at least $50 billion in assets



HouseHouse • None


SenateSenate • “Exam Fee Parity” provision requires OCC to propose to the FDIC an amount for FDIC to transfer to the OCC to promote exam fee parity between state and federally-chartered depostitories.



HouseHouse • Creates CFPA as independent agency• CFPA starts with single Director and then

replaced with 5-member Commission• Oversight Board includes SLC Chair

Consumer Financial ProtectionConsumer Financial Protection

SenateSenate • Creates Bureau of Consumer Financial Protection located within – but autonomous from -- Fed

• Bureau headed by Director named by President and confirmed by Senate




SenateSenate • Primary federal rulemaking, examination and enforcement authority under long list of federal financial consumer protection laws

HouseHouse • Primary federal rulemaking, examination and enforcement authority under long list of federal financial consumer protection laws




SenateSenate • Covered entities:• Depositories• Non-depository mortgage businesses• Other larger non-depositories

providing consumer financial services and/or products as determined by Bureau and FTC

HouseHouse • Covered entities• Depositories • Non-depositories providing consumer

financial services and/or products (unless explicitly exempted)



HouseHouse • For banks at $10 billion or under, federal exam responsibility stays with federal safety and soundness agency


SenateSenate • Contains similar provision



HouseHouse • CFPA required to coordinate with state regulators on rulemaking and examinations

• Risk-focused supervision to consider quality and extent of state regulation


SenateSenate • Bureau required to coordinate with state regulators on examinations

• Risk-focused supervision to consider consumer protections under existing law



HouseHouse • CFPA required to develop registration regime for non-depository covered persons

• CFPA required to coordinate with states and state systems


SenateSenate • Bureau required to develop registration regime for non-depository covered persons

• Bureau required to coordinate with states and state systems



HouseHouse • Federal standards are “floor not ceiling” to tougher state consumer protection standards

• Limited case-by-case carve out for national banks & federal thrifts based on Barnett “prevents or significantly interferes with” standard


SenateSenate • Federal standards are “floor not ceiling” to tougher state consumer protection standards

• Limited case-by-case carve out for national banks & federal thrifts explicitly referencing Barnett decision


2010 Washington Fly-InSpecific IssuesSpecific Issues

Expanding State-Federal CoordinationExpanding State-Federal Coordination•Mandated state-federal coordination across prudential and consumer protection functions

Role of Federal ReserveRole of Federal Reserve•Preserving Fed supervision over state-member banks and protecting the role of the Reserve Banks •Ongoing advocacy through CSBS statements and letters, national and regional media, and partners (ICBA, ABA, dialogue with Reserve Banks and Board of Governors)



Pre-emptionPre-emption•Continue advocacy through CSBS Statements and letters, national and regional media, and partners (NGA, Attorneys General, Consumer Groups)•Constant vigilance against efforts to expand national bank pre-emption and erode state enforcement authorities

Lending LimitsLending Limits•Need to strike language from Senate Bill

Specific IssuesSpecific Issues



De Novo Branching and Closing the Thrift Loophole De Novo Branching and Closing the Thrift Loophole in the Deposit Capin the Deposit Cap•ICBA neutral on branching•Push back from state banking trades

Specific IssuesSpecific Issues



Thank You

Documents

2010 Washington Fly-In R E GULATORY REFORM UPDATE Buz Gorman Margaret Liu John Ryan March 22-23, 2010