WASHINGTON — Two days after a top lawmaker accused his agency of flouting the law to give national banks an unfair advantage, Comptroller of the Currency John D. Hawke Jr. denied it — and fired back that actually the regulatory system is skewed against national banks.

In a speech before the Exchequer Club on Wednesday, Mr. Hawke said unfairly forcing national banks to subsidize the examination fees of state banks makes the national charter less attractive and endangers the health of the dual banking system. After the speech he addressed concerns raised by House Banking Committee Chairman Jim Leach, who on Monday called for an independent investigation of a decision by the Comptroller’s Office to let four national banks hold stock in public companies as a hedge against equity swaps and in other limited circumstances.

In a letter to Mr. Hawke, Rep. Leach said that the decision violated the legal separation of banking and commerce and that the process through which it was made “skirts the law in a secretive manner purposefully designed to hide that act from the United States Congress.”

The letter also raised the possibility that the agency’s legal department and its head, Julie L. Williams, had acted without the full knowledge of the comptroller.

Mr. Hawke defended his employees and their work. “I don’t think there is a better legal department in the government than the OCC’s or a better chief counsel than Julie Williams,” he said. “I have complete confidence that the opinions that have been issued by our [legal] department … are completely correct and eminently sustainable.”

He challenged Rep. Leach’s characterization of the agency’s decisions, saying, “I don’t think these rulings we have made have any implications at all for banking and commerce.”

Mr. Hawke cited the Bank Holding Company Act, which lets holding companies own up to 5% of the voting stock of a public company. None of the banks that were told holding equity against swaps is permissible would be allowed to breach that 5% limit, he said.

“We are well within the ambit of what Congress has seen as permissible,” Mr. Hawke said.

He did appear to concede, though, that the decision-making process may not have been as open as it should have been.

“I think we ought to err on the side of complete transparency,” Mr. Hawke said. “We ought to be making all of our rulings public unless there is a compelling reason not to do so. We are going to be taking a look at our disclosure policy to make sure that is the way we act in the future.”

Mr. Hawke made no mention of the controversy during his speech, focusing instead on his assertion that national banks, in addition to reimbursing the OCC nearly 100% of what it costs to examine them, also pay a de facto subsidy that lowers examination fees for state banks.

Mr. Hawke based his claim on the fact that the Federal Deposit Insurance Corp. and the Federal Reserve System share supervision of state-chartered banks with state regulators. He said most of the money the FDIC and the Fed spend on oversight of these banks comes from earnings on premiums national banks have paid to the Bank Insurance Fund and from reserve deposits they hold at Fed’s district banks.

While the FDIC is examining different means of reforming deposit insurance, he said, it should take the opportunity to remove “incentives to diminish the national banking system” built into the current structure.

According to Mr. Hawke, 53% of the money in the bank fund came from national banks. “Thus, every dollar expended by the FDIC on state nonmember bank supervision represents, in effect, a charge of 53 cents to national banks,” he said. This artificially lowers state banks’ examination fees, making the state charter more attractive at the expense of the national, Mr. Hawke said.

According to OCC data, national banks paid $379 million in examination fees in 1999, covering 98.7% of the cost of supervising them. State banks, however paid $160 million to state banking commissioners, only 15.5% of the $1.03 billion that the OCC says their regulation cost.

The remaining $870 million worth of supervision, Mr. Hawke said, was provided free of charge by the Fed and the FDIC. “It is clear that state-chartered banks are the recipients of substantial federal subsidies, delivered by their federal supervisory agencies,” Mr. Hawke said.

Mr. Hawke offered several possible solutions to the problem, including “unbundling” the fees that banks have paid the FDIC, suggesting that one component be designated for insurance and the other for costs of bank supervision.

Fees for banks that do not receive FDIC supervision could be directly rebated or lowered by a transfer of funds from the FDIC to the OCC, he said.

Neil Milner, president of the Conference of State Bank Supervisors, responded that the perception of inequity was the result of a decision by the OCC to market the national charter to banks as a one-stop regulatory shop, making it impossible for the agency to share responsibilities with the Fed and the FDIC.

“They have made the policy decision not to invite the FDIC and the Fed to assist in the examination process,” Mr. Milner said.

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