WASHINGTON - Compliance exams covering fair-lending and other consumer laws will be simpler and less time-consuming for small national banks under streamlined exam procedures issued this week by the Comptroller of the Currency.

"The new procedures reduce the burden on qualifying banks without compromising our efforts to ensure compliance with banking-related consumer protection laws," said Comptroller of the Currency Eugene A. Ludwig in a statement Monday.

National banks with less that $250 million in assets will undergo the new compliance exams starting Oct. 1. The most significant difference is that each small national bank will know exactly what to expect when examiners arrive, according to OCC spokeswoman Janis Smith.

"The biggest change lies in the standardized procedures," Ms. Smith said. "You won't have a case where a bank in North Dakota is being viewed differently than a bank in South Carolina."

"It will cut down on the amount of time it takes to complete an exam," she added.

Rather than riffling through stacks of documents to ensure compliance with laws ranging from the Equal Credit Opportunity Act to Truth-in- Savings, examiners will take a broader look at an institution's compliance programs.

For example, examiners now check every mortgage disclosure form filled out by a bank. Under the new procedures, examiners will simply confirm that the same preprinted forms are being used by the bank.

In other areas, examiners will review a specified number of each type of document, instead of all of them.

Examiners are not supposed to go beyond the new guidelines unless the bank engages in "high risk" activities or a pattern or practice of violations is found. Even then, examiners must get the approval of a supervisor.

Earlier this year, the OCC got rave reviews when it tested the streamlined exams on 17 banks.

"It was very focused, very concise - it cut our exam time from four to two weeks," said Jim Rakes, president and chief executive of the National Bank of Blacksburg, in Blacksburg, Va. The $200-million-asset bank was one of the institutions in the pilot program.

"This reinforces the idea that you need to treat smaller banks differently from larger ones - otherwise they'll just get buried," said Karen Thomas, director of regulatory affairs for the Independent Bankers Association of America.

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