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As hundreds of national banks disappear and community banks increasingly chose a state charter, policymakers must consider the impacts.
October 26
The Dime Savings Bank of Williamsburgh is returning to its roots as a state-chartered thrift.
The $4 billion-asset Dime, based in Brooklyn, N.Y., announced Monday that it intends to convert from a federally chartered thrift supervised by the Office of the Comptroller of the Currency to a state-chartered thrift to be supervised by New York State Department of Financial Services.
The Federal Deposit Insurance Corp. would step in as Dime's federal regulator and the thrift's holding company, Dime Community Bancshares Inc., would continue to be supervised by the Federal Reserve Board.
The Dime Savings operated as a state-charted institution from its founding in 1864 until 1995, when it went public and switched to federal charter under the supervision of the Office of Thrift Supervision. But since the OTS was eliminated as part of the Dodd-Frank Act and was folded into the OCC over the summer, many federal thrifts have switched to state charters, citing reduced regulatory costs and a desire to be closer to their regulators.
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In a news release, Dime said the switch would produce "some annual cost savings," although it declined to provide a specific estimate. No significant changes to Dime's "activities [or] investments" are expected, it said. The conversion is projected to close in the second quarter, pending regulatory approvals.
Dime's business model is founded on "using local deposits to reinvest in the predominant form of housing in New York City — multifamily dwellings," chairman and chief executive Vincent Palagiano said in the release. The New York Department of Financial Services is "focused on the local New York community banks and financial institutions," he said.
