Ruby Valley National Bank to convert to state charter

Ruby Valley National Bank is preparing to become a state controlled bank – a move bank officials say will more closely reflect their rural roots and business focus.

Since 1917, Ruby Valley National Bank has operated under a national charter, which means they come under the regulation of the Department of Treasury and the Office of Comptroller of the Currency, said Karen Town, who is the manager of the Sheridan branch and vice president of the bank.

As a state chartered bank, they will fall under the regulation of the Montana Department of Administration Division of Banking and Financial Institutions.

Ultimately the only thing that’s really going to be noticeable with the change will be the bank’s name and logo. The bank will drop the “national” and become Ruby Valley Bank, Town said.

The reason for shifting from a national charter to a state charter is pretty simple, she said. As banking regulations have gotten more complex over the past few years, it’s gotten more difficult to deal with federal regulators who don’t understand the banking customers and the markets in rural Montana.

“Not that (state regulators) will be anymore lax,” Town said. “They will just understand more of what we do and how we do it.”

The majority of banks in Montana are now under a state charter, said Ruby Valley National Bank president Ken Walsh.

Back when the back started, operating under a federal charter was important because it offered a level of security, Walsh said. But when the Federal Deposit Insurance Corporation came into existence at the end of the Great Depression, to secure bank deposits around the country, the federal charter became less important.

Now the Ruby Valley National Bank board of directors is ready to make the shift to a state charter, he said.

The change should be done by the first of January.

“It’s a change, but I think it’s going to be a change for the positive,” Walsh said.


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