Anticipating the unification of bank and thrift charters, the Office of Thrift Supervision is promoting a new community bank charter.
Restrictions on bank ownership would be scrapped, providing a new source of capital. Commercial lending by these new banks would be sharply limited to guard against a bank favoring an affiliated company over its competitors.
"Community banks should ... not be permitted to invest more than a relatively small percentage of their assets in large-scale commercial loans," she told a group of bankers. "This would ensure that banking and commerce would not combine and result in an undue concentration of economic power."
Ms. Buck's remarks, made last week at a reception for bankers sponsored by Rep. Frank A. LoBiondo, R-N.J., were released by OTS Wednesday. Acting OTS Director Jonathan L. Fiechter backed the charter reform idea in a speech to the Exchequer Club Wednesday.
OTS officials want to combine the best aspects of the current thrift and bank charters. For example, Mr. Fiecther urged blending the expanded powers, branching authority, and ownership flexibility of thrifts with the unrestricted consumer and small-business lending authority of banks.
Ms. Buck said the community bank charter envisioned at OTS would offer mortgages, home equity loans, consumer and education loans, and credit cards. Banks would be able to sell insurance products from any size towns, as thrifts may now. (Banks may only sell insurance from towns with fewer than 5,000 people.)
"It simply doesn't make sense to impede consumer access to insurance," she said.
The new community bank would - like banks and thrifts today - be permitted to sell investment products, including securities, brokerage, and investment advice.
But unlike thrifts today, the new charter would allow unlimited small- business lending. Unlike banks today, the new charter would permit real estate development and management so the institution could help rebuild its community, Ms. Buck said.
Congress is expected to take up charter issues after enacting legislation to shore up the Savings Association Insurance Fund. That bill was passed last year but vetoed by President Clinton because it was part of the balanced budget package.
