Banking In Ohio: Ohio Credit Unions Opposing Plan for State

A proposal to combine Ohio's bank, thrift, and credit union agencies into one superregulator has drawn fire from state-chartered credit unions.

The merged divisions would be supervised by a superintendent of financial institutions. Examiners would be cross-trained in all three industries, though lead examiners would be specialists.

The most vocal opponents of the merger and of state funding for it have been Ohio's 322 state-chartered credit unions, which want to maintain their regulatory independence.

The Ohio Credit Union League has organized petition and letter-writing campaigns, said John Florian, manager of government relations.

"Clearly, a major issue for us is how well the examination process is going to go when they try to cross-train bank and thrift regulators," he said.

Some state-chartered credit unions - which pay sales tax in Ohio - may switch to federal charters if the consolidation takes place, costing the state tax revenue, Mr. Florian said.

The Ohio Bankers Association, which is neutral on the issue, would support a merger if it achieved savings for bankers and contributed to the overall effectiveness of the process, said Michael Van Buskirk, executive vice president.

"We have not gotten from the Department of Commerce to date a formal answer to our question on cost savings," he said.

The Ohio League of Financial Institutions, which includes savings and loans and savings banks, wants to see more specifics, said Robert K. Schmitz, who runs the Columbus, Ohio, consulting firm bearing his name.

"The Ohio league is not interested in that unless there is an economic benefit," he said. "We're opposed to it until we see the language."

The Community Bankers Association of Ohio also wants to see specifics, he said.

The agency consolidation would increase efficiency, allow more management flexibility, and save about $1 million a year, said Donna Owens, director of the Ohio Department of Commerce, which oversees financial institutions.

"With . . . the downsizing of savings and loans and interstate banking and branching, it is the right time to be making these kinds of internal management decisions," she said. Otherwise, "I could see fee increases in savings and loans and savings banks because of the decreased revenues that have occurred in that area."

The assets of state-chartered savings and loans and savings banks declined to $14.8 billion at June 30, 1994, from $22.4 billion in 1985.

More details of the merger are expected to be unveiled in the state Senate this month as part of a larger state agency restructuring.

A measure authorizing nearly $3 million over two years to fund the division was removed from a budget bill recently by the state House of Representatives. The Commerce Department is trying to reinstate the funding as the Senate considers the bill.

Currently, divisions are fee-supported and get no general tax revenue.

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