Thrifts may sell Internet access to the public under a new Office of Thrift Supervision ruling.
In a mid-April legal opinion, the agency's lawyers concluded that, under its rules for selling excess data processing capacity, thrifts may offer Internet access so long as it remains a limited side business.
The opinion came eight months after the Office of the Comptroller of the Currency allowed a bank, for the first time, to become an Internet service provider, and it followed by two weeks the OTS' invitation for public comment on its rules affecting electronic banking.
Regulators want to give institutions flexibility to offer new services, said Jerry E. Jones, an information risk management consultant at KPMG Peat Marwick. "That's going to help them bring in some new customers," he said.
Selling access to cyberspace is the electronic equivalent of locating a branch near a shopping mall, wrote OTS deputy chief counsel Dwight C. Smith 3d.
The OTS opinion was prompted by an inquiry in January from a $55 million-asset thrift in the Middle Atlantic region whose name OTS officials withheld. Planning to offer Internet banking services through a subsidiary, the institution wants to sell Internet access to local customers and noncustomers as a marketing tool and to offset start-up costs.
The thrift, which has initial capacity for 500 Internet access accounts, pledged that at no time would noncustomers number more than half its Internet clients.
At least a half dozen banks are believed to be selling Internet access, primarily in rural areas lacking local competition, experts said.
