By the Division of Banks

July 7, 2004

Jennifer J. Johnson
Secretary, Board of Governors of the Federal Reserve System
20 th Street and Constitution Avenue, N.W.
Washington, DC 20551

RE: Notice of Proposed Rulemaking: Risk-Based Capital Standards:
Trust Preferred Securities and the Definition of Capital
Docket No. R-1193

Dear Ms. Johnson,

The Commonwealth of Massachusetts Division of Banks (the "Division") welcomes the opportunity to comment on the notice of proposed rulemaking: Risk-Based Capital Standards: Trust Preferred Securities and the Definition of Capital. The Division is the primary regulator of 175 Massachusetts state-chartered banks, 145 of which exist in either the mutual form of ownership or under a mutual holding company. To date, a significant and growing number of such banks have prudently utilized the proceeds of trust preferred securities issued within their holding company structures. Accordingly, the Division is interested in seeing this relatively low cost capital continue to be included in Tier 1 capital.

The Division agrees that a change in accounting rules does not change the fundamental concepts that resulted in Tier 1 inclusion initially. As such, the Division supports the proposal and commends the Board of Governors on its efforts to codify the inclusion of trust preferred securities into Part 225, Bank Holding Companies and Change in Bank Control (Regulation Y).

If you should have any questions relative to the contents of this letter, please contact Deputy Commissioner David J. Cotney at (617)956-1500 extension 1542. Once again, thank you for the opportunity to comment on the proposal.

Very truly yours,

Steven L. Antonakes
Commissioner of Banks