Though by law thrifts still comply with most of the same capital and other standards they have faced for decades, they and their representatives said they expect the new regulators to force them to comply with bank-like requirements.
For many thrifts, that would mean holding more capital at the holding company level, complying with tougher lending limits and facing more skeptical examiners.
"One of the concerns we would have as a thrift under the OCC is, are they used to regulating a thrift that has a concentration in assets, [as] we do with single-family mortgages?" said John Dicus, the president and chief executive officer of $8.5 billion-asset Capitol Federal Financial in Topeka, Kan. "There are not as many banks that have concentrations in an asset class, so that's a concern."
Their fears are primarily due to a perception that the Office of Thrift Supervision, which is to be disbanded under the recently enacted regulatory reform law but which has another year before it officially closes its doors, was insufficiently tough on its institutions.
Though the agency adamantly denies the charge, many industry representatives said the Fed and the OCC will take a long, hard look at their new charges to ensure they are properly supervised.
"At the thrift level, where the OCC is replacing the OTS, the concern is, will the OCC kick the tires harder to prove the OTS wasn't a good regulator?" said Lawrence Kaplan, a lawyer at Paul, Hastings, Janofsky & Walker LLP. "That's a concern for a lot of people."
The law splits thrift supervision, which was consolidated at the OTS, into two parts. As it does for bank holding companies, the Fed will oversee thrift holding companies while the OCC supervises individual thrifts.
OTS officials said current concerns are just anxiety over the change of regulators.
"It's change, and change is always looked upon differently by a lot of people," said Tom Barnes, the deputy director of examinations, supervision and consumer protection at the OTS. Thrifts have had an accepted "set of rules and who the regulator is and what kind of company, and now that's going to change. … Things will be ironed out. They will have to ask the questions, and we have to be sensitive to their questions."
Many observers said the biggest changes will occur at the holding company level. Under current practice, the OTS does not require specific capital ratios for thrift holding companies but uses bank holding company standards as a baseline and varies that as needed, depending on the type of company. Though the OTS has said such an approach makes sense given the differences between thrift and bank holding companies, the Fed is not expected to agree.
Instead, the central bank has used consolidated capital standards that ensure a bank holding company maintains adequate capital to support its companywide activities and does not become excessively leveraged.
Observers said they expect that, as a result, thrift holding companies will have to hold more capital. "That's obviously a pretty big concern for them," said Dwight Smith, a partner at Alston & Bird LLP. "At the moment, savings and loan companies aren't subject to the capital requirements banks are."
The Fed and OTS have also emphasized different capital structures, with the Fed more heavily focused on Tier 1 capital.
