CHAPTER 461

FORMERLY

HOUSE JOINT RESOLUTION NO. 3

OPPOSING THE RECENT PROPOSAL BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM TO INTRUDE UPON THE HISTORIC AUTHORITY OF STATE LEGISLATURES AND BANK REGULATORY AUTHORITIES TO MONITOR AND REGULATE THE ACTIVITIES OF STATE BANKS.

WHEREAS, the strength and vitality of this country's financial marketplace has depended in large part upon the separate state and federal regulation of this country's state and federally chartered banks, respectively; and

WHEREAS, the General Assembly and Governor of the State of Delaware and regulatory officers acting in accordance with Delaware law have historically had authority over the activities of banks and other financial institutions organized under the laws of this State; and

WHEREAS, in exercising their responsibilities pursuant to such authority, the General Assembly and Governor of this State and Delaware banking regulators have always acted to promote the safety and soundness of Delaware's financial institutions while simultaneously recognizing that such institutions must evolve to meet the needs of a dynamic, rapidly changing marketplace for financial services; and

WHEREAS, the General Assembly and Governor of this State and Delaware banking regulators have balanced the competing goals of bank regulation with great success, as evidenced by the tremendous growth in Delaware of safe and sound financial institutions which provide the public with a wide array of needed financial services; and

WHEREAS, under our nation's "dual banking system", the President and Congress of the United States and federal regulatory officials have traditionally limited their direct regulation of financial institutions to those organized under federal law; and

WHEREAS, in recognition of the primacy of state legislatures and bank regulators with respect to the regulation of state chartered financial institutions, federal law has historically been drafted and interpreted so as not to intrude upon the regulatory authority of state legislatures and bank regulators; and

WHEREAS, the Federal Reserve Board has recently proposed to amend the provisions of its Regulation Y, enacted pursuant to the Bank Holding Company Act, which amendments would prohibit state chartered financial institutions from engaging in various activities otherwise permissible under state law; and

WHEREAS, the Amendments to Regulation Y proposed by the Federal Reserve Board would directly interfere with and usurp the historic authority of the states to determine the range of activities in which state chartered financial institutions may engage; and

WHEREAS, the Amendments to Regulation Y proposed by the Federal Reserve Board wrongly presume that the states are incapable of monitoring the continued safety and soundness of state chartered financial institutions; and

WHEREAS, the Amendments to Regulation Y proposed by the Federal Reserve Board wrongly presume that the Federal Reserve Board is better able to assess the financial service needs of the citizens of this State than the General Assembly and Governor of this State; and

WHEREAS, the Amendments to Regulation Y proposed by the Federal Reserve Board threaten the continued viability of our nation's dual federal and state banking systems; and

WHEREAS, the Amendments to Regulation Y proposed by the Federal Reserve Board threaten the continued ability of Delaware to ensure the provision of financial services in a prudent manner within a pro—competitive environment; and

WHEREAS, the Federal Reserve Board has provided parties that would be affected by its proposed amendments to Regulation Y with the opportunity to comment on these proposed amendments.

NOW, THEREFORE:

BE IT RESOLVED by the House of Representatives and the Senate of the 135th General Assembly of the State of Delaware, with the approval of the Governor, that the amendments to Regulation Y proposed by the Federal Reserve Board constitute a legally and historically unjustifiable interference with the prerogatives of the General Assembly and Governor of the State of Delaware to determine the range of activities in which financial institutions organized under the laws of this State may engage consistent with safe and sound banking practices.

BE IT FURTHER RESOLVED that upon passage of this Resolution, a suitably prepared copy be forwarded to the Board of Governors of the Federal Reserve System and to each member of the United States Congressional delegation of the State of Delaware as an expression of our opposition to the Federal Reserve Board's proposed Amendments to Regulation Y.

Approved February 8, 1989.