Promised lower exam fees and higher lending limits, nine Oklahoma community banks have given up their national charters and switched to state charters in the past year.

And with the state lower ing examination fees by 2.5% - at the same time the Office of the Comptroller of the Currency is raising fees for national banks - Banking Commissioner Mick Thompson is counting on more conversions in 2001.

"We hope it's a trend," Mr. Thompson said, adding that three more banks are scheduled to convert by the end of January.

Mr. Thompson announced Dec. 5 that Oklahoma would immediately cut its exam fees. Five days earlier, the OCC announced that it will raise exam fees January 1 by 2% to account for inflation. That means a national bank with $100 million of assets would pay $39,340 in fees in 2001, while a $100 million-asset bank chartered in Oklahoma would pay $19,000, according to Mr. Thompson.

OCC spokesman Robert Garsson said many states tout lower fees as a reason to switch charters. But he pointed out that states offer lower fees because they alternate with the Federal Reserve and Federal Deposit Insurance Corp. and therefore examine banks only every other year.

"We think it is unseemly of them to market a charter on a subsidy," he said.

Peoples Bank of Oklahoma City converted to a state charter in April, and since then, the $20 million-asset thrift's income has increased by $5,000 to $6,000 a month, because of savings from exam fees and an increase in its lending limit from 15% to 30% of capital.

"That's a lot of money for a small bank," said Randy Wright, a Peoples' board member and president of $115 million-asset Yukon National Bank in Yukon, Okla. Mr. Wright said Yukon is also considering switching charters. Some bankers are crediting Mr. Thompson for the recent spate of conversions.

"One of the reasons we're doing it is that we have a state banking commissioner who is very proactive," said Brad Krieger, chairman and CEO of $484 million-asset Arvest Bank in Oklahoma City, which converted to a state charter last December.

Mr. Krieger said that the Oklahoma commissioner's use of technology has made working with state examiners easier. Banks can send information to the commissioner's office electronically and reduce the amount of time examiners need to spend at the bank.

"They're still covering everything," Mr. Krieger said. "There's no diminishing in quality of service."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.