Magazine article American Banker

For Banks, Power to the States an Idea with 50 Strikes against It

Magazine article American Banker

For Banks, Power to the States an Idea with 50 Strikes against It

Article excerpt

Taking power from federal regulators and giving it to the states is all the rage among Republicans these days.

But lawyers for big banks - a group not often associated with the Democratic Party - aren't opposed to giving more power to Washington bureaucrats, especially the bureaucrats at the Office of the Comptroller of the Currency.

That at least was what the lawyers seemed to be saying at the Practising Law Institute's "New Business of Banking" meeting last week in New York.

Panelists at the $995-a-head conference said state regulators are making nothing but trouble as banks try to cross state lines, sell insurance, and buy competitors. They weren't too complimentary of Congress, either. Even the Federal Reserve Board took some knocks for being unwilling to change with the times.

The lawyers had only kind words, however, for the Comptroller's office.

This shouldn't be too surprising. The agency is headed, after all, by longtime banking lawyer Eugene A. Ludwig. And his chief counsel, Julie L. Williams, happened to be presiding over the conference, together with Federal Reserve Bank of New York First Vice President Ernest T. Patrikis and lawyer Melanie L. Fein of Arnold & Porter in Washington.

But it was more than that. For lawyers trying to clear the way for banks to enter new realms, it's a lot easier to deal with a federal regulator aware of all the changes going on in the financial world than 50 state regulators who may not be so aware, or 535 members of Congress who for the most part don't care.

This is the case even when the Comptroller's office is not involved, as is evidenced by the situation in bank antitrust law, where the Justice Department and Federal Reserve Board prevail.

"I worry today much more about state attorneys general than about what goes on in Washington," said mergers-and-acquisitions guru H. Rodgin Cohen of Sullivan & Cromwell in New York. …

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