June 8, 2011 the Honorable Mary L. Schapiro Chairman Securities And
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June 8, 2011 The Honorable Mary L. Schapiro Chairman Securities and Exchange Commission 100 F Street NE Washington, DC 20549 Dear Chairman Schapiro: We the undersigned bankers, representing banks of all charter types, sizes, and geographies, and from every State in the Union, write to express our deep and continuing concern about the Securities and Exchange Commission’s (SEC) proposal for the registration of municipal advisors. We believe the proposal goes well beyond what is required either by the statute or the problems that the statute was written to solve. In doing so not only would it subject banks to yet one more layer of regulation for the same activities, but it would increase the cost and reduce the availability of financial services for local municipal governments and other municipal operations, including municipal hospitals, housing authorities, and school districts, among others. As proposed, the rule would label as “municipal advisors” banks and many bank employees providing essential and traditional bank services to their local municipalities, including day-to-day deposit, cash management, custody, trustee and lending services – a result we do not believe furthers any legitimate policy goal and, as a recent letter from House Financial Services Committee Chairman Spencer Bachus explained, is not what Congress intended. If finalized in its proposed form, the rule would result in tens of thousands of bank and banker registrations, major new compliance costs, along with additional, redundant layers of multiple rules by the SEC and Municipal Securities Rulemaking Board (MSRB) for the very same products and services for which we are already comprehensively supervised by the prudential banking regulators. We draw your attention particularly to the impact on our local municipalities. While we are all deeply involved in the life and activities of our communities, the unavoidable effects of the proposal would interfere with our ability to offer the services that we are accustomed to providing and upon which our municipalities rely. One example is symptomatic of others: the MSRB has proposed as part of its accompanying rule that an advisor could not provide products as a principal to a municipality it is advising. This blanket prohibition would prevent a bank from offering any deposit products to a municipality that it, or an affiliate, advises. It is hard to overestimate the hardship this one provision may cause for our local municipalities. We renew our recommendation that the rule state clearly that banks and bankers providing traditional banking products and services are not required to register as municipal advisors. Further, banks should be granted the same exemption from municipal advisor registration as registered investment advisers are for comparable advisory activities. No supervisory gap would be created by this approach: the prudential banking regulators today comprehensively supervise and examine banks with respect to all of their activities to all types of customers, including municipalities. Thank you for your attention to this important matter. Respectfully, Leslie R. Andersen Gary D. Hemmer Bank of Bennington First National Bank of Waterloo Bennington, NE Waterloo, IL Stephen P. Wilson Albert C. Kelly, Jr. Bernard H. Wright, Jr. Kelley Sanders LCNB National Bank SpiritBank Lebanon, OH Bristow, OK Steven C. Bagwell Gary Base Vision Bank Gary Basham Ada, OK Alan McDonald ViewPoint Bank Leon Moore Plano, TX Bank of Floyd Floyd, VA Charles Maddy Summit Community Bank Daryl Wilton Moorefield, WV Cornerstone Bank York, NE Mike Jacobson James Marcuccilli NebraskaLand National Bank STAR Financial Bank North Platte, NE Ft. Wayne, IN Odean Busby Brian D. McCoubrey PriorityOne Bank The Savings Bank Magee, MS Wakefield, MA Mike Mauldin G. William Beale First Financial Bank Union First Market Bank Hereford, TX Richmond, VA Bradley I. Davis Gwen H. Easter Hampton State Bank FB&T Hampton IA Perry, OK Kurt F. Graff Thomas J. Shara Northwest Commercial Bank Lakeland Bancorp, Inc. Lakewood, WA Oak Ridge, NJ Thomas L. Hoy David M. Gohn Glens Falls National Bank and Trust West Plains Bank and Trust Company Company West Plains, MO Glens Falls, NY Richard E. Holbrook Raymond O’Conor Eastern Bank Saratoga National Bank & Trust Boston, MA Company Saratoga Springs, NY H.K. Hatcher NBC Oklahoma Joseph P. Campanelli Oklahoma City, OK Flagstar Bank Troy, MI Peter Judkins Franklin Savings Bank Dennis E. Nixon Farmington, ME International Bank of Commerce Laredo, TX Julieann M. Thurlow Reading Co-operative Bank Ignacio Urrabazo, Jr. Reading, MA Commerce Bank Laredo, TX Marcia R. Honomichl Commercial State Bank Fred Rusteberg Wagner, SD IBC Bank Brownsville, Texas Mary Ann Deacon Lakeland Bancorp Renato Ramirez Oak Ridge, NJ IBC Bank Zapata, Texas Kevin L. Olson Grundy Bank J. Kimbrough Davis Morris, IL Capital City Bank Group Tallahassee, FL Freddie J. Bagley Community Bank of Mississippi Michael D. Stevens Brandon, MS Centera Bank Sublette, KS Donna M. Stone First Community Bank of Bedford C. Alan Horner County First Federal Shelbyville, TN Twin Falls, ID David Bochnowski Thomas W. Ellison Peoples Bank, SB Commercial Bank of Texas, NA Munster, IN Nacogdoches, TX Robert K. Chapman W. E. Bazemore, Sr. United Bank & Trust Monroe County Bank Ann Arbor, MI Forsyth, GA Craig Meader Stan Kiser First National Bank of Kansas First Federal Savings Bank Burlington, KS Parkersburg, WV Mark W. Funke James E. Martin Bank of Oklahoma, N.A. Northwest Savings Bank Oklahoma City, OK Erie, PA J. Thomas Johnson J. Dan Oliver Citizens Building & Loan Association Vinings Bank Greer, SC Smyrna, GA Frank Townsend G. Kenneth Perine Southern Bank & Trust National Bank of Middlebury Aiken, SC Middlebury, VT John Poole Justin C. Brande Carolina Alliance Bank National Bank of Middlebury Spartanburg, SC Middlebury, VT Glenn Rowley Christine Sickles RBS Citizens National Bank of Middlebury Providence, RI Middlebury, VT Charles Schmalz R. Scott Smith, Jr. East Wisconsin Savings Bank David C. Hostetter Kaukauna, WI James E. Shreiner Elizabeth Reister Haynes Standard, Jr. Fulton Financial Corp. First State Bank Lancaster, PA Wrens, GA Craig A. Roda Rick Whaley Fulton Bank Citizens Bank of Americus Lancaster, PA Americus, GA Timothy B. Bronson H. Wayne Griest Kelly A. Paul Continental Bank Bonnie B. Boucher Plymouth Meeting, PA Brian W. Chaput Chris Bumps Bill Docking Rose Mary Smith Union State Bank Community National Bank Arkansas City, KS Derby, VT William B. McNeely Mary J. Marceau Bloomfield State Bank Thad Richardson Bloomfield, IN Community National Bank Lyndonville, VT Robert C. Snyder Luzerne Bank Justin M. Bourgeois Luzerne, PA Community National Bank Montpelier, VT Kyle A. Campbell Astra Bank Martin Riley Abilene, KS The Citizens Bank of Weston, Inc. Weston, WV Rick D. Smith Farmers National Bank Daniel C. Berninger Buhler, KS Craig W. Kremser The Muncy Bank and Trust Company Thomas D. McGavran Muncy, PA State Bank of Delphos Delphos, KS Daryl R. Tressler MainSource Financial Group Neil Joiner MainSource Bank Bank of Dooly Greensburg, IN Vienna, GA Andrew J. Briggs Kelly C. Mason Bank of Geneva First National Bank in Pratt Geneva, IN Pratt, KS Arden L. Cramer Christopher W. Bergstrom Logansport Savings Bank, FSB Colleen A. Kelly Logansport, IN Cardinal Bank McLean, VA Gary Yager Vision Bank John A. Scaldara, Jr. Topeka, KS Jeffrey M. McCarron Mike Galeone The Columbia Bank Columbia, MD Brian H. Lehman Ron N. Mullins Reliance Bank First Financial Bank, N.A. – Altoona, PA Stephenville Stephenville, TX Thomas F. Rokisky CNB Bank, Inc. Jim Davidson Berkeley Springs, WV F1rst Financial Bank, N.A.- San Angelo San Angelo, TX John L. Rusie First Bank Richmond Samuel L. Erwin Richmond, IN The Palmetto Bank Greenville, SC John R. Korona Mansfield Bank John Tyson Mansfield, MA Montgomery Bank Ailey, GA G. Alex Gettys Pickens Savings and Loan Associaiton Glen S. White Pickens, SC Mutual Bank Whitman, MA F. Scott Dueser J. Bruce Hildebrand Rob Julius Gary L. Webb State Bank of Lizton David L. Copeland Brownsburg, IN Gary S. Gragg First Financial Bankshares, Inc. Rhonda Wiles Abilene, Texas State Bank of Lizton Brownsburg, IN Ron Butler First Financial Bank, N.A. Donald S. Shamey Abilene, TX NexTier Bank Butler, PA Kenneth A. Williamson First Financial Bank Skip Numrich Mineral Wells, TX First National Bank Scott City, KS Doyle Lee First Financial Bank –Weatherford Thomas M. O'Neil Weatherford, TX First Financial Bank Eastland, TX Robert Pate F1rst Financial Bank - Huntsville William P. Hayes Huntsville, TX Kish Bank State College, PA John J. Dolan Bruce A. Benyshek First Commonwealth Financial Equity Bank, N.A. Corporation Wichita, KS Indiana, PA Douglas M. Morley Christopher D. Myers The Valley State Bank Citizens Business Bank Belle Plaine, KS Ontario, CA Lloyd K. Culbertson Donald P. Johnson Connie Zillinger American Business Bank Morris Engle Los Angeles, CA Art Lee Debra Kennedy Richard Sanborn Janet McCall Seacoast Commerce Bank Tim VanLaeys Chula Vista, CA William Smith Russ Bowman Scott Racusin Barry Yoxall Wedbush Bank John George Los Angeles, CA Lynn Clements L. Kent Culbertson Craig Blunden Stacye Redinger Provident Savings Bank FSB First National Bank and Trust Riverside, CA Phillipsburg, KS Melanie J. Dressel Jayne L. Coleman Columbia Bank Kendall State Bank Tacoma, WA Valley Falls, KS Bradford C. Paige Gary M. Coleman Kennebunk Savings Kendall State Bank Kennebunk, ME Valley Falls, KS Lyndon O. Wells John M. Sturd INTRUST Bank Union State Bank Wichita, KS Arkansas City, KS Thomas N. Pelletier Matt Reynolds Northfield Savings Bank First Financial Bank Northfield, VT Cleburne, TX Michael L. Seaver William S. Demchak Sonja S. Fuller The PNC Financial Services Group People's United Bank Pittsburgh, PA Burlington, VT Jim Walton Pat Wagers Kevin Sabin Woodhaven National Bank Rick Huck Fort Worth, TX Greg Reed J. Robert Kelly Larry T. Wilson Arvest Bank First Arkansas Bank & Trust Tulsa, OK Jacksonville, AR John Hendren John P. Bonora Great Western Bank Fairfield County Bank Casa Grande, AZ Ridgefield, CT J.