TENNESSEE'S STATE BANK CHARTER
THE CHARTER OF CHOICE
There are many advantages of becoming a Tennessee state chartered institution:
- Greater Access to the Regulator - Because state banks in Tennessee have
closer geographical proximity to their primary regulator,
communication is more direct and more effective. The Department
of Financial Institutions has an "open door" policy
with regard to all institutions. Representatives of any
institution may call staff members or the commissioner with
questions or concerns and get a personal audience quickly.
We encourage officers, directors and employees of banks
and other institutions to stay in close contact with us;
no problem is deemed unimportant.
The Department's main office is located in Nashville, Tennessee. However, the Department maintains field offices located in East, Middle and West Tennessee. The Department's examiners work from the various field office locations and are familiar with the local community and the market area in which they work. This provides a better and more feasible working environment for the examiner and the banker. In addition, if needed, a one on one audience between the examiner and banker can easily be arranged.
prides itself on maintaining experienced staff members.
The Nashville office staff and the examining staff have
multiple years of experience in handling examination and
application related issues.
every banker to visit our Department at any time, to ask
questions and/or provide suggestions. We welcome and appreciate
comments on how we can provide a better and more efficient
- Lower Fees and Assessments
- Generally, the fees charged by the Tennessee Department of Financial
Institutions are lower (e.g. application fees, assessments)
than those charged by the OCC. Specifically, pursuant to
T.C.A. Section 45-1-118(c)(1)(B), no state-chartered bank
is charged, in its annual banking assessment, more than
it would be charged if it were nationally chartered in Tennessee.
For our largest institutions, the fees may be the same as
the OCC fee, but they will not be greater.
- Examinations -
The department has cooperative examination agreements with
both the Federal
Deposit Insurance Corporation and the Federal Reserve, whereby
examinations are conducted on an alternating basis. We make
every effort to have minimal disruption on operations. The
use of cooperative examination agreements between state
banking supervisors and the FDIC essentially assures that
a state bank will have only one regulatory examination on
either a 12 or 18 month cycle since each agency relies on
the alternating examination agreement.
- Commitment to Quality - The department is committed to the provision of quality constituent services, both by its central office and field office staffs. This commitment includes an out-reach to the banks we supervise, encouraging their input for improvements in our processes and procedures. We are actively involved in strategic planning at all levels of the organization and trust that our commitment to quality translates into better service to the institutions that we regulate.
- Working Relationship
with Tennessee Bankers Association - The department enjoys a close working
relationship with the TBA. We share ideas and honest assessments,
work together on legislation, continuing education and other
areas that affect state chartered banks and together strive
to make banking a more profitable enterprise in Tennessee.
- Working Relationship
with Federal Regulators - The department enjoys a good working relationship with
the Federal Deposit Insurance Corporation and the Federal
Reserve Banks. We interact well with other regulatory agencies
both state and federal on those occasions when our regulatory
paths cross, providing mutual assistance when possible and
federal regulators typically will consult with the state
banking supervisor as to an appropriate remedy for problem
issues involving state chartered institutions, since the
state banking supervisor is the chartering agent for the
bank. This state/federal consultation process often results
in greater overall flexibility on the part of the regulators.
bank application and/or conversion process is a joint effort
between the State and Federal regulator which minimizes
investigation and turnaround time. In many instances, the
Department will accept a copy of the federal application
filing so that regulatory burden on the applicant is reduced.
See Link to Application Forms to
obtain a copy of the Interagency Charter and Federal Deposit
Insurance Application and the Interagency Biographical and
examination program with the federal regulators minimizes
the intrusion of examiners into institutions which are well-managed
and well-capitalized, freeing up staff to concentrate on
institutions in need of closer supervision.
- Training of examiners
- The department endeavors to provide up-to-date training for its examination staff
and other professional staff in order to better assist banks
with the difficult issues which face financial institutions
in this competitive environment.
- State law parity
statutes - Admittedly, the OCC has been very progressive
in its efforts
to allow national banks to engage in a number of activities
beyond traditional banking. However, Tennessee has a parity
statute, commonly referred to as the wildcard provision,
which allows state banks to engage in any activity that
a national bank may engage in, subject to safety and soundness.
For that reason, state banks can have the same advantages
and the same competitive edge that a national bank would
- Relationship with
the Conference of State Bank Supervisors (CSBS) - The department is active in
the CSBS and has worked with our counterparts nationally
to effect a seamless regulatory system for financial institutions
doing business on an interstate basis. The Department is
a party to the nationwide agreement providing a single regulatory
point of contact at both state and federal levels for multi-state,
state chartered banks. The home state regulator of a state
chartered bank is the primary regulator and the single point
of contact for the bank. Through the commissioner and senior
staff, on-going efforts are being made to assure that banks
can compete on an interstate basis.
- Director training
- The Department recently formulated a training program
for directors of new Tennessee state chartered banks. The
training session, typically, is a one day session in the
Department's Nashville office. Staff members and representatives
from the FDIC and/or Federal Reserve are also on hand to
be sure that all aspects of director responsibility are
covered. The training session was formulated to give directors
hands on experience and provide information as to expectations
as to their role as a director of a new bank. In addition,
the session provides opportunity for the Directors to meet
with Department staff, to ask questions and to discuss,
face to face, any concerns, issues or suggestions they may
that the combination of access, low fees, expertise and experience
of the department's staff, and favorable state laws make the
state banking charter the charter of choice for Tennessee
banks. We welcome your interest and would encourage you to
contact us if you need additional information or if we may
offer assistance to you.
state banking supervisors are not only regulators assuring
that banks under our supervision operate in a safe and sound
manner, we support the dual banking system and encourage the
formation and prosperity of all banks under our supervision.
We operate in a manner that encourages state banks to remain
state banks, and to encourage the formation of new banks.
The department tries to create a positive environment and
by doing so we encourage the formation of new banks as well
as the conversion of existing financial institutions into
state chartered institutions.
forward to working with you during the new bank or conversion
process and appreciate your confidence in the Department and
for helping us to make the Tennessee state charter the charter
New Bank Application Forms and Procedures
Instructions for Obtaining Your ABA Routing
Historical Commission for Compliance with the National Historic
Merger Act Application - Interagency
of Change in Control - Interagency
For more information please contact:
Program Administrator for Applications