In the wake of the Dodd-Frank Wall Street Reform and Consumer Protection Act, many institutions are asking themselves whether it might be more advantageous to convert to a national bank charter. Keith Fisher, of counsel in Ballard Spahr's Washington, D.C., office, advises clients on charter conversions. He outlines the pros and cons in a guest column for American Banker.
Before Dodd-Frank, federal thrifts had several advantages over national banks: consolidated supervision by a single regulator, broad interstate branching, "field preemption," the absence of activity and investment limitations for holding companies, and the absence of holding company capital adequacy and "source of strength" requirements. With the demise of the Office of Thrift Supervision, there is no longer a single regulator. Field preemption for federal thrifts has been discarded. And the grandfathered unitary thrift holding companies will be subject to capital adequacy requirements and to a statutory requirement to serve as a "source of financial strength." Branching powers will be the same as for national banks.