States have a one-man agency doing these things and which have a board or commission of more than one man. Mr. CULLOM. We have that information already prepared and we will submit it promptly. Mr. MULTER. I have seen it before and I think you can submit it to us without too much difficulty. (The information requested follows:) Status of State bank supervision NOTE: In 29 of the 50 States and Puerto Rico the supervisor has the sole authority to approve new bank charters; in 17 States this authority rests in the hands of a banking board; in 2 States this authority is shared by the supervisor and a banking board; and in 3 States another official of commission has this responsibility. In 13 of the 50 States and Puerto Rico branching is entirely prohibited; of the remaining, the supervisor has the sole authority to approve branch applications in 26 States; in 9 States this power rests with a banking board; in 2 States it is shared by the supervisor and the banking board; and in 1 State another commission has this responsibility. Source: NASSB 1964 annual survey. Colorado... Connecticut. Chairman State cemetery board. Remitters of money to foreign countries. Yes... No.... No.... Yes... Yes... Yes... Money order outlets, title and guarantee companies, funeral licenses. Yes... Yes... Yes... Yes... Yes... Yes... Registration of securities dealers Yes. Yes.. Yes.. No... Yes.. Yes.. Yes... No.... Yes... Yes... Yes... Yes... and salesmen. None. Mortgage brokers, perpetual care cemeteries, tax collection, No.... Delaware. Georgia.. Hawaii. None. Yes.. Yes. Do. Idaho.. Yes. No... Yes... Yes. No... Yes. Do. Indiana. Yes.. Yes.. Yes... Yes... Yes. Yes... Pawnbrokers and currency ex changes. None, Do. Do. Yes... Ex officio commissioner of securities. Yes... Sales of checks, and money orders, examines State departnants and officers handling public moneys. Yes... No.. Yes Yes... Yes Yes... Yes... Yes.. Yes. Yes.. Yes. Yes.. Yes Cooperative credit associations. supervisor, collection agency. None. Yes... Insurance companies, perpetual care cemeteries, money remitters, currency exchanges. Yes... No... Yes... Yes... No.... Yes... Perpetual care cemeteries, collection agencies, and securities dealers. Yes... Yes... Yes... Yes... Yes... Yes... Investment companies, license Yes... Money orders, North Carolina.. North Dakota.... Yes... No... No... No.......... Yes Yes... Yes... Yes.. Yes. No... No... No.. No... None. Pawnbrokers. Do. Yes. Yes. Yes. None. Do. Do. Do. Perpetual care cemeteries, sale of checks and money orders. None. Securities dealers and insurance. Do. Currency exchanges, foreign exchange, and collection agencies. Yes... No.... Yes... No.... No... No.... State offices and institutions and other political subdivisions. 1 Many responsibilities supervised not as commissioner of banking, but in dual role of State comptroller. Source: NASSB annual survey, 1964. Mr. MULTER. You might also submit to us for our record a statement indicating how this question is resolved by the State supervisors, where the Comptroller rules that national banks may or may not do certain things, as you have indicated in your testimony, and the Federal Reserve Board on the other hand says you do the opposite to what the Comptroller has ruled. Bear in mind that the Federal Reserve Board has jurisdiction over national banks and that all national banks must be members of the Federal Reserve System, and at the same time it has jurisdiction over the State banks which are members voluntarily. Mr. CULLOM. Right. Mr. MULTER. I would like to know how this conflict of regulation, order or directive, by these two Federal agencies is resolved. If you will do that for us it will be very helpful. Mr. CULLOM. We will be most happy but I think that I should point out we are getting into an area now that normally this assocation does not have direct information on, but I think we will be able to get that for you, sir. Mr. MULTER. If a national bank gets an order from the Comptroller of the Currency, theoretically he must comply Mr. CULLOM. Correct. Mr. MULTER. The Federal Reserve Board directs to the contrary. How is that resolved? We will ask the same questions of those agencies. We have this further situation. A State bank is a member of the Federal Reserve System. The Comptroller has no jurisdiction over such bank. But the Comptroller says to the national bank in your State it may do so and so or may not do it. The Federal Reserve Board takes an opposite position and can enforce its order against the State bank. What conflicts are there in this situation and to what extent and how can they be remedied? Mr. CULLOM. We shall be glad to submit full information on it, and if I might make a prediction, I think it will reflect that the various laws of the States have had a very stabilizing influence in that the supervisor has had to resolve those particular differences certainly as to State member banks. Mr. MULTER. Thank you very much. There is nothing further, today. You have been very helpful. Your association has always been helpful to this committee in its various appearances and the members of your staff always make themselves available to us and they too have been of tremendous help. Thank you very much. Mr. CULLOM. You are very kind and we pledge our full cooperation at any time. (The information requested follows:) NATIONAL ASSOCIATION OF SUPERVISORS OF STATE BANKS, Hon. ABRAHAM J. MULTER, Chairman, Subcommittee on Bank Supervision and Insurance, DEAR MR. CHAIRMAN: At the time NASSB testified before the Subcommittee on Bank Supervision and Insurance of the House Banking and Currency Committee with respect to H.R. 107 and H.R. 6885, bills to consolidate the Federal supervisory banking agencies, several questions were asked on which we did not have immediate answers. We did promise, however, to obtain this information and supply it to the subcommittee. It was necessary for us to poll the State bank supervisors in order to obtain the information required. The first three questions asked by the committee were combined together in our poll as follows: 1. "Set forth and explain situations known to you where in the past 3 years a State bank could not obtain something from your department (branch, move of location, authorization for capital increase, etc.) and as a result, converted to a national bank; and/or 2. "A group of entrepreneurs were denied a charter by your department, and as a result sought and received a national bank charter from the Comptroller of the Currency; and /or 3. "A State bank sought to merge another bank (s), and being turned down by your department, converted to a national bank and subsequently was able to fulfill its merger plan(s)." Twenty-seven States replied. However, only 13 of them supplied an affirmative answer to 1 or more of the above questions. In cases where the supervisors answered in the affirmative the reasons for their action and the backCited were ground in a particular situation were generally explained in detail. a total of 29 separate situations. Actions of the supervisors in these situations varied considerably making a generalized answer to the above questions impossible. For your information, the complete results of this poll are supplied in the attached folder marked with Roman numerals I, II, III. The fourth question asked by the committee is summarized as follows: "Explain in your opinion, just what if anything there is in the operation of FDIC that could be eliminated without in any way weakening or impairing the function of the Corporation." Supervisors were further asked to cite situations in which the FDIC acted in such a fashion as "to interfere with the operations of State banks" under your supervision. Supervisors were asked not to include in their answer the association-supported policy that the Comptroller of the Currency be removed as a member of the threeman FDIC Board. Previous surveys of the State bank supervisors indicate overwhelming support for this policy. Twenty-seven States replied. However, only nine of them supplied an affirmative answer. Here is a sampling of their replies. Three States felt State alone should approve branch applications. Three States felt FDIC was "too slow" in processing branch and charter applications. One State suggested that there was no need for FDIC to examine banks switching from Federal Reserve member to insured nonmember status. Two States felt that relocation of a head office is no real concern of FDIC. Two States noted that FDIC policies on loan and investment classification was in conflict with their State policies. One State suggested that there is no need for an annual FDIC examination once a bank is approved for insurance; rather, the FDIC should accept the State examination report. One State called "too rigid" the FDIC policy of tying in and demanding additional capital based on 3-year projections of deposit volume as a condition to the approval of branches. Only one State cited an example of FDIC "interference." For your information, the complete results of this poll are supplied in the attached folder marked with Roman numeral IV. Question 5 is answered on a single sheet marked No. 5. earlier.) (Submitted to you Question 6 required another poll and the answers are summarized as follows: "Indicate and explain what, if anything, your State bank examiners inquire into during the course of their examinations which is not also sought by either the FDIC, the Comptroller of the Currency, and/or the Federal Reserve." Twenty-seven States replied. However, only 10 of them answered affirma tively. Of the States supplying affirmative answers, all agree that the differences between State and Federal examinations are minute. Some felt, for example, that the States were more interested than the Federal agencies in technical conformity to State banking laws. Some felt that the States as a rule were less liberal. Most States indicated one or another item looked for in a State examination which is not checked out in a Federal examination: i.e., interest rate disclosure, verification of nonledger accounts, etc. . No significant differences were noted. For your information, the complete results of this poll are supplied in the attached folder marked with Roman numeral VI. Question 7 is covered by two separate statistical tabulations which are marked No. 7. (This data was supplied to you earlier.) We are unable to answer question No. 8. You will recall that this related to controversies between the Federal Reserve and the Office of the Comptroller of the Currency, and how these controversies are resolved. I believe you will agree that the answer to such a question would necessarily have to come from one of the parties involved-i.e., the Federal Reserve or the Comptroller of the Currency. You will also recall that when our witness, Mr. F. Shelby Cullom, testified he answered one question from the floor by referring to a list of disputes over various subjects. Chairman Multer directed that this list be made part of the record. The list is attached, and we have labeled it exhibit A. It has been a pleasure to obtain this information for the subcommittee, and if we can be of further service to you or if you have any questions regarding the attached information, please do not hesitate to call on us. Cordially, HOLLIS W. BURT, Executive Vice President. Mr. MULTER. We had scheduled for this morning, Mr. D. Emmert Brumbaugh, president of the Central Pennsylvania National Bank, representing the Independent Bankers Association. Unfortunately, time has run out on us. We appreciate your patience. Would it be convenient for you to come back on Tuesday, the 27th of April? STATEMENT OF D. EMMERT BRUMBAUGH, CHAIRMAN, LEGISLATIVE COMMITTEE, INDEPENDENT BANKERS ASSOCIATION OF AMERICA; ACCOMPANIED BY HERSCHEL SCHOOLEY, WASHINGTON REPRESENTATIVE OF INDEPENDENT BANKERS ASSOCIATION OF AMERICA Mr. BRUMBAUGH. Mr. Chairman, I think that I could do that but I am wondering if you would object to filing this brief inasmuch as it has been distributed and Mr. MULTER. No. We would be very happy to take your statement. Mr. BRUMBAUGH. And we also will have the benefit of H.R. 7133, which we just received this morning that will give us a little more opportunity to bring in additional testimony. Mr. MULTER. Please leave your statement as prepared with us. We will make it a part of the record at this point and when you return, you may give us a supplemental statement covering Mr. Moorhead's bill H.R. 7133. You can then submit to questions on both statements. Mr. BRUMBAUGH. Thank you very much. I just want to make one little statement for our organization and to introduce Mr. C. Herschel Schooley, who is our Washington representative. We see very little wrong with our present setup, as far as administration of the banks is concerned, in the various supervisory agencies, but it is lack of cooperation between them that has caused the trouble. It would seem to me that if you had a corporation, with some pulling one way, and some the other way, the result would be you would have to get rid of one or the other administrator, and I think that this problem can be solved without very much legislation. A few changes, I think, are necessary but I do not believe they are very important. |