The four banking and thrift agencies jointly examined 65 interagency regulations over the last two years and decided to scrap or simplify 70% of them, according to a report released Tuesday.
The regulators' effort was prompted by the Riegle Community Development and Regulatory Improvement Act of 1994, which asked the agencies to review their rules, discard outmoded ones, and make the rest more uniform and user-friendly.
The "review did not serve to simply validate the status quo," the regulators assured Congress.
The agencies, required to report on their progress by Sept. 23, delivered a 245-page joint report to the House and Senate Banking committees and congressional leaders.
"Agencies have made significant progress," said James D. McLaughlin, director of regulatory and trust affairs for the American Bankers Association. "We were very pleasantly surprised at the very constructive way the regulators approached it.
"The bankers I've met have referred to the agencies as kinder, gentler regulators," he said.
"It's been a consciousness-raising process for the agencies," said Robert G. Rowe, regulatory counsel for the Independent Bankers Association of America. "We hope it will continue."
In an overview chapter, the report detailed the agencies' accomplishments, ranging from agreement on uniform safety and soundness standards to development of a single form for reporting suspected crimes or suspect activities.
The report also discussed the regulatory agencies' planned changes, including working to clarify and simplify rules for reporting the acquisition of 25% or more of a financial institution's voting stock; scheduling a review of Community Reinvestment Act regulations - revised in 1994 - for 2002; and cutting four of CRA's outmoded policy statements, such as one requiring institutions to analyze the geographic distribution of their loans.
The agencies also are working to eliminate inconsistent application of common rules. For example, the report identifies five types of transaction in which the agencies apply risk-based capital rules differently.
Sensitivity to risk will be added to Camel ratings used by all regulators in safety and soundness exams. The four agencies also will break down these ratings into individual grades for each component as well as a composite score.
The rest of the report consists of four sections written by each agency, detailing its own streamlining efforts:
*The Federal Reserve Board has made it easier for bank holding companies to do everything from acquire banks to offer asset management services and make new foreign investments. It also will review all aspects of foreign bank regulation this year.
*The Federal Deposit Insurance Corp. looked at 37 of its rules, dumped 10, and changed 10. It is rewriting its deposit insurance rules and simplifying the method for determining insurance coverage of joint accounts.
*The Office of the Comptroller of the Currency streamlined its rules for a variety of bank activities, from setting up automated teller machines to sharing employees and space with nonfinancial institutions. It is changing its examiner handbook and has published 17 new handbook sections.
*The Office of Thrift Supervision cut 8% of its regulations. It plans to clarify and streamline its capital standards and make some of its rules uniform with those of the banking agencies.