WASHINGTON - Legislation that would add a state bank regulator to the Federal Deposit Insurance Corp.'s five-member board has been introduced by Sen. Phil Gramm.

The State Bank Representation Act would create a sixth seat for a state banking supervisor on the FDIC board.

"We are in some degree, a dangerous degree, flying blind without having both elements of our dual banking system participating on the FDIC Board," Sen. Gramm said in a floor statement March 15.

"While the FDIC insures the deposits of both state and national banks, no one is seated at the table who can be counted on to present the perspective of state-chartered banks," Sen. Gramm added.

Sen. Gramm is a member of the Senate Banking Committee and a candidate for the Republican presidential nomination.

The FDIC board's five seats are now held by the Comptroller of the Currency, the director of the Office of Thrift Supervision, and three members appointed by the President. One of those seats is vacant.

Under the measure, which was co-sponsored by Senate Banking Committee member Richard C. Shelby, R-Ala., a state bank supervisor would be appointed to the board by the president and confirmed by the Senate to serve a two-year term.

Like the Comptroller and the OTS director, the state bank supervisor would not be paid for serving on the board.

James B. Watt, president and chief executive of the Conference of State Bank Supervisors, said Sen. Gramm's nod to the importance of state- chartered banks and state regulation was long overdue.

"State supervisors are the primary regulators of two-thirds of the nation's banks, but they have never had formal representation on the FDIC board," Mr. Watt said.

Adding a sixth seat could hamper the ability of the board to reach a majority, noted Karen Shaw, president of ISD/Shaw Inc., a company that tracks bank legislation and regulation.

"The immediate concern is that this creates an even number of votes on the board, and that's always a bad idea," Ms. Shaw said.

She also expressed concern that serving on the board could divert a state bank supervisor's attention from the task of overseeing the state's banks.

"It would definitely be a major commitment, but this would accomplish a very important thing for states," said James A. Hansen, director of the Nebraska Department of Banking and Finance.

"We protect the FDIC insurance fund and work in conjunction with the federal banking regulators. It would stand to reason that we have input," added Mr. Hansen, who also serves as chairman of the state supervisors conference.

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