The Comptroller of the Currency hired a Washington consultant to pick the brains of bank chief executives. It turned out they have a lot on their minds, including some harsh assessments of the agency.

"Bankers often find the OCC complex and confusing," the consultant concluded in a report submitted to the agency. "The Federal Reserve is seen by many as a more desirable supervising agency.

"Bankers surveyed also seemed to view the OCC as more political and its personnel as more transient than its sister federal regulators," the report added.

The agency paid ISD/Shaw Inc., a consulting firm here, $25,000 to talk with bankers about regulation and emerging risks facing the industry.

Karen Shaw, the firm's president, said she spent two months personally interviewing the top executives at 25 of the largest national as well as state-chartered banks in the country. CEOs of 38 smaller national banks were surveyed by telephone.

Comptroller Eugene A. Ludwig, in an interview Tuesday, said hiring Ms. Shaw is part of a broader outreach effort at the agency.

"We're looking at ourselves intensely in terms of how we do things and how we can do things better," Mr. Ludwig said. "I'm very big on outreach."

Mr. Ludwig is working on a memo to his top staff in the field, titled "Banker Views of OCC." The memo, designed to improve communications with bankers, will be discussed next week at a meeting he plans to hold with his regional staff.

He said the effort fits into the Clinton administration's "reinventing government" campaign.

Recommendations in the Sept. 23 report are being considered by the agency, which has taken several steps over the last two months designed -- at least in part -- to change the industry's perception of the agency.

The Comptroller's office has cut the cost of specialty exams in half, slashed corporate application fees, and reduced 1995 assessments on national banks by 6%.

The agency also has announced plans to cut the time and trouble banks must commit to getting applications approved.

In the interview, Mr. Ludwig embraced the report's recommendation that he set up a committee of national bankers to advise the agency.

The Fed has a similar panel of bankers, but it was only able to create its Federal Advisory Committee through an exemption from federal law.

Mr. Ludwig said Tuesday he plans to lobby Congress for an exemption, too.

The 53-page Shaw report, obtained from the agency under the Freedom of Information Act, also details bankers' opinions on a variety of topics from capital rules to credit risk. It concludes that leaders of large banks "are relatively pessimistic about the future." (See article below.)

In the last two years, 116 national banks have converted to state charters.

That's nearly three times as many banks as in the two prior years. In September, $30 billionasset NBD Bank in Detroit decided to switch to a state charter to save about $1.5 million in annual exam fees.

When large banks leave the OCC fold, the decrease in revenue pinches the agency's budget. Many of the Comptroller's recent changes are seen as defensive moves to convince national banks to stick with the agency.

Mr. Ludwig said that "really isn't a big goal." But he added, "I worry about the press drumbeat on that."

Since taking over the OCC in 1992, Mr. Ludwig said he has remained focused on four things: keeping the industry safe and sound, reducing administrative burden, opening competitive opportunities, and ensuring fair access to credit.

"If changes were required to keep banks that threatened safety and soundness, we won't do that," he said.

Nonetheless, the Shaw study clearly indicates that the Comptroller has a big image problem.

The report paints the agency as second to the Federal Reserve. The third banking agency, the Federal Deposit Insurance Corp., was barely mentioned in the report. Of the 38 small national bank CEOs interviewed by ISD/Shaw, 78% said they have considered switching to a state charter.

Small banks are turned off by the Comptroller's higher fees and "the abusive attitude of OCC examiners in the past," according to the study.

But small national banks did say that they consider their charter more prestigious than a state charter and believe "that FDIC examiners are less competent than the OCC examiners."

While large national bank CEOs are not interested in switching charters, "the many complaints voiced about the OCC indicate considerable dissatisfaction."

"Virtually all of the heads of state-chartered institutions were adamant in their choice of the state member bank charter."

Even with the lure of operating a cross-country franchise, the large state-chartered banks told Ms. Shaw that they will not change to a national charter.

A CEO from one large regional bank planning to take advantage of interstate branching acknowledged it would be easier to do with a national charter. But he said the bank will not convert in order to "to preserve its good relationship with its local Federal Reserve Bank. To this bank, the OCC represents an unknown regulator with an equivocal reputation."

Part of the Comptroller's problem stems from his vigorous and visible struggle to reform the Community Reinvestment Act over the last year and a half.

To cheers from the industry, some Fed governors have blasted plans to require banks to report the race and gender of certain borrowers.

Mr. Ludwig has championed the change, adding to his problems with the industry.

"Disagreements among financial industry regulators have created the perception that the OCC is the most aggressive federal regulator on compliance issues," the Shaw report found. "This is increasing interest in state charters because bankers clearly feel their social-policy examinations will be more sympathetic in other venues."

Asked about the CRA reform proposal, which is nearing completion, Mr. Ludwig said the agency is trying to balance the concerns of the industry and community groups.

"I think a lot of the hysteria has been misplaced," Mr. Ludwig said, noting that so far comments on race and gender reporting are split 50-50.

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