FDIC Seeks Comment on Bank Parity Proposal  

The FDIC recently issued a notice of proposed rulemaking to amend its regulations to promote parity between state banks and national banks.  The proposal interprets section 24(j) of the Federal Deposit Insurance Act, 12 U.S.C. § 1831a(j), and would amend the FDIC’s implementing rule at 12 C.F.R. § 331.3, which today limits that parity to a host-state branch.

The proposed amendment to 12 C.F.R. § 331.3 would clarify that when a host-state law does not apply to a national bank, that law would not apply to an out-of-state state bank offering services in the host state, with or without a branch.  The chartering state’s law would apply instead.

The FDIC issued the proposed rule, in part, because of ongoing litigation over the Illinois Interchange Fee Prohibition Act (see prior coverage here).  The amendment would clarify that section 24(j) parity under 12 C.F.R. § 331.3 does not depend on the existence of an Illinois branch, so an out-of-state state bank providing services in Illinois would be subject to the Illinois Interchange Fee Prohibition Act only to the same extent as an out-of-state national bank.  The proposed rule would not determine whether federal law preempts the Illinois Interchange Fee Prohibition Act.

Comments on the proposed rule must be received by November 23, 2026.