The District of Columbia has adopted the Federal Deposit Insurance Corp. as the regulator for all banks chartered there, finally falling into line with the 50 states and other U.S. territories.
As of Nov. 1, "district banks" are "state banks" and the FDIC regulates them.
An oversight by lawmakers had caused the Office of the Comptroller of the Currency to be the previous regulator for banks chartered in Washington. No state regulator was assigned when the former D.C. Department of Banking was created in 1986, so the OCC, which had been the bank regulator when the District had no government of its own, remained so.
"It never made any sense," said D.C. Commissioner Lawrence Mirel. "The OCC had authority over national banks and D.C. banks but no one else - not Puerto Rico, the Virgin Islands, or any of the other territories."
The quirk was not an issue until WashingtonFirst Bank, the first D.C.-chartered bank, opened in May.
Mr. Mirel said, however, that the change had been in the works since late March, when the Department of Banking merged with the Department of Insurance and Securities to form the Department of Insurance, Securities, and Banking.
The goal of the consolidation was "to enhance the economic development potential of the District" by having a single regulator for all financial products, and the move to the FDIC corresponds with that.
"Mainly it's our desire to make the District of Columbia an attractive place for banks and businesses to set up," Mr. Mirel said. "And if you have the same federal regulator as a national bank, then there is no reason to be a local bank."
Since the department chartered WashingtonFirst, Mr. Mirel said, several other organizations have expressed interest, though no official applications have been filed.
