CSBS Chair Says FDIC Should Look to State Regulator Experience

In a new column for American Banker, Charlotte Corley, who serves as chair of the Conference of State Bank Supervisors (CSBS) and as commissioner of the Mississippi Department of Banking and Consumer Finance, argues that the Federal Deposit Insurance Corp. (FDIC) should look to state bank regulators when looking to fill board ranks.

For one, she argues, it is required by law, after Congress amended the Federal Deposit Insurance Act in 1996. As amended, the Act “require[d] that, separate from the comptroller’s and the director of the Consumer Financial Protection Bureau’s seats on the FDIC board, one of the three independent positions must be held by someone with state bank supervisory experience.”

Furthermore, she says, the requirement clearly states that it must be “a person who has worked in state government as a supervisor of state-chartered banks.” Since 2012, nobody has met this requirement.

She says that state bank supervisors have a wealth of unique experience to offer, as state-chartered banks – regulated by state bank supervisors – comprise 79 percent of all banks in the nation with approximately 4,400 in total. They provide 75 percent of all agriculture lending and nearly half of all small business lending.

“That means they are helping farmers finance their new equipment and a local restaurant or hardware store maintain its business or grow,” she writes. “In small-town America, these issues are critically important. And I think it is equally important for the FDIC board to have someone who understands the state banking system. State bank supervisors have a unique perspective on banking services in local communities. They are mandated to ensure the safety and soundness of these banks, protect consumers and support economic development of their communities.”

Corley says that the lack of state bank supervisory experience on the FDIC’s board of directors must change – “and now is the time.