Without competition from the state banking departments, who can charge less in the corporate area because of smaller infrastructures to support, the OCC would not have lowered its fee structure. Now the test will be to see if the examination fees or assessments will be lowered for national banks. And this comes at a difficult time for both state and federal regulators. The current merger frenzy, as well as the implementation of the 18-month examination cycle, is having a serious impact on all regulatory agencies in terms of whether or not they are overstaffed. So not only are both state and federal regulators striving to reduce costs to match the competition, but now the merger activity and the 18-month cycle are accelerating the need for staffing and overall cost reviews.
Fewer examinations mean fewer examiners.
The bankers are going to expect lower exam fees and assessments and it will be up to us as regulators to staff down and deliver cost reductions. So I believe that the dual banking system will continue to expose to the light of day any inefficiencies in the state or federal regulatory system to the benefit of the banking industry. We have just modernized our 1943 Texas Banking Code with the Texas Banking Act of 1995 . This Act is very progressive and very modern and includes the creative thinking of a great number of people who worked on the project. The people in this room who have considerable influence with members of Congress need to consider that any discussion of new bank powers needs to again include letting the states be the incubator for new products and services.