House Mulls New Agency for Federal Charters
WASHINGTON -- A House Banking Committee task force is weighing a proposal for a new federal banking agency within the Treasury to oversee federally chartered banks and thrifts as well as their holding companies.
The Federal Deposit Insurance Corp. would become responsible for all state-chartered institutions, while the Federal Reserve Board would have jurisdiction over bank and thrift holding companies with assets of more than $10 billion.
The proposal is similar to Bush administration recommendations. But it would maintain and expand the FDIC's authority over state-chartered institutions and leave the Fed with jurisdiction over all large institutions. The administration would have eliminated the FDIC's supervisory role and given the Fed jurisdiction over state-chartered banks only.
|Not Locked in Cement'
Rep. Jim Leach of Iowa, the panel's senior Republican, said the proposal was "not locked in cement." He added that it had been forwarded to the agencies for comment.
The proposal incorporates Mr. Leach's view that the FDIC should retain oversight of state-chartered institutions. But he said it also contains significant compromises with Treasury, which could win administration support.
"I feel that I have gone out of my way in deferring to Treasury, because I believe the case for an independent regulator is very strong," he said.
Kenneth E. Guenther, who heads the Independent Bankers Association of America, called the proposal "a victory for Treasury that will further politicize bank regulation." He warned that it would hurt the Fed by "isolating it from the real world of community banking.
"The Fed will increasingly be viewed as a creation of the big banks," he said.
The task force is under pressure because House Banking Committee Chairman Henry B. Gonzalez, D-Tex., has set a June 13 deadline for introducing the bill that the full committee will consider later this month.