WASHINGTON - Underscoring the growing competition between state and federal regulators, the New York Banking Department is asking Empire State banks to compare its fees with those charged by the Comptroller.

The Office of the Comptroller of the Currency recently reduced its fees for a number of corporate applications. Last week, New York acting superintendent of banks Carmine M. Tenga sent a letter telling the 98 banks he regulates that even with the OCC cuts, it is cheaper to be a state-chartered bank.

"Apparently the OCC is knocking on doors and trying to persuade people to convert to national charters," a spokeswoman for the New York regulator said. "Our feeling is that the state charter is a better deal, and we're just reminding our banks that it is."

An OCC spokeswoman said the agency lowered bank fees to match its current operation, costs, and that further fee cuts could follow. The OCC regulates 74 banks in New York.

Both state and federal bank regulators generally benefit by keeping number of banks they supervise as high as possible. That's because they charge fees for some regulatory services - fees that help pay regulators' salaries.

In recent years, the OCC has been under pressure because record numbers of national banks have opted for state charters. In the past two years, 118 banks have left the OCC, nearly three times as many as in the previous two years, according to OCC data.

Some worry that regulators straining to keep banks' affections could move from reducing fees to trying to attract banks with lax supervision. But state regulators say the competition is good.

James B. Watt, president of the Conference of State Bank Supervisors, said lower regulatory costs are "a great example of the dual banking system at work."

The OCC spokeswoman said, "Comptroller [Eugene A.] Ludwig has been very clear that his first priority is safety and soundness and he will not take any action that would hurt the safety and soundness of the national banking system."

Mr. Watt said state-regulated banks have historically paid regulatory fees that are half what OCC-regulated banks pay. But that is not the most important reason banks are changing charters. "Fees are important, but they are far from the only reason that banks are converting from the OCC," he said.

Bankers tell him that "the more important factors in their decision to convert are the accessibility of state regulators . . . and the fact that the state regulators know the local communities," Mr. Watt added.

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