Cost competition between state regulators and the OCC, and among state regulators themselves, has been fueled by two important structural changes that have occurred in the banking indus- try over the past two decades. The number of bank charters has declined, largely because of increased bank merger and consolidation activity, and the size and complexity of banking organiza- tions has increased. The first change—a decline in the number of charters—means that the OCC and state regula- tors are competing for a declining member base. As we have seen, the cost of supervision remains one of the few distinguishing features of charter type. In ways that we explain below, the declin- ing member base.
