June 2, 2006

Honorable John C. Dugan
Comptroller of the Currency
250 E Street, S.W.
Washington, D.C. 22019

Honorable Martin J. Gruenberg
Acting Chairman
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, D.C. 20429

Honorable John M. Reich
Director
Office of Thrift Supervision
1700 G Street, N.W.
Washington, D.C. 20552

Dear Sirs:

We are writing to ask you to clarify your agencies’ understanding of the authority that would be granted under provisions of the pending financial services regulatory relief bills entitled “Enhancing the Safety and Soundness of Insured Depository Institutions” (Section 405 of H.R. 3505 and Section 702 of S. 2856). We are requesting this clarification because of recent analyses of these provisions in the American Banker. These analyses suggest that the provisions would give the banking regulators authority to require a bank director to maintain the capital of a troubled depository institution without the director’s agreement. The articles also suggest that the federal chartering agencies and FDIC could use the provision to require the directors of an insured depository institution to enter into capital maintenance agreements with the agencies as a condition of granting a charter or providing deposit insurance.

While we believe it is important that banking agencies are able to enforce agreements that protect the deposit insurance fund, we also believe that our national banking policies should encourage the participation of highly qualified people on the boards of insured depository institutions. That is why we are very concerned about requirements that could potentially reduce the participation of qualified men and women on the boards of depository institutions.

Thank you for considering our views. We look forward to your reply.

Sincerely,