Comptroller of the Currency Eugene A. Ludwig took office in April 1993 vowing to eliminate unnecessary regulations and rewrite what was left in plain English.
"We intend to review every regulation from A to Z," Mr. Ludwig said during his first testimony before Congress. "It indeed is going to take time, but we're going to undertake (the job) with vigor."
Mr. Ludwig appointed Julie Williams, the agency's chief counsel, as architect of the overhaul. The work hasn't been glamorous, but it has yielded a set of simpler rules that national bank executives say work better.
The agency also has cut the fees that national banks pay for supervision. In 1995 assessments were trimmed 6%, and this year national banks will pay 3% less.
"They're making the regulations a lot less cumbersome, and they've gotten rid of provisions that are archaic," said John Mancuso, general counsel for $27 billion-asset Society National Bank, Cleveland.
The OCC targeted 29 of its rulebook's 35 parts for review. To date, all but two of the 29 sections have been tackled. Eleven rules have been revamped, and 16 more are awaiting final action or are still out for public comment.
Ms. Williams said the project will be complete by yearend.
"We're definitely not through, but we've finished the first critical stage," she said.
The Comptroller's office has started a trend among the regulatory agencies. The Office of Thrift Supervision has followed suit with a wholesale review of its regulations and the Federal Deposit Insurance Corp. is on the brink of a similar evaluation.
To date, the Comptroller's most significant proposal would allow national banks to figure various activity limits from a standard calculation of capital.
Currently, banks must calculate capital in a number of different ways. For example, the agency requires national banks to use different capital calculations when determining limits on loans to one borrower, investment securities, and loans to insiders.
"Many of the different OCC regs trigger slightly different capital requirements, and that's a real burden for bankers," said Karen Thomas, director of regulatory affairs at the Independent Bankers Association of America. "What they've done in this area is going to be very helpful."
Kathy Curtis, compliance officer at Century National Bank in Washington, D.C., praised a related OCC decision to quit requiring national banks to figure capital every time a loan is made. Instead, banks calculate capital at the end of each quarter and loan decisions are made based on the most recent tally.
"This change has made my life a lot easier," Ms. Curtis said.
Kevin Blakely, executive vice president at $67 billion-asset KeyCorp in Cleveland, singled out more liberal real estate appraisal rules.
Banks no longer have to get appraisals on loans above $100,000. The threshold was lifted to $250,000 by all the agencies. For owner-occupied buildings, the level was increased to $1 million.
"It's much less expensive and onerous now," Mr. Blakely said. "No bank worth its salt is going to offer a mortgage without checking out the property first."
An important proposal still pending at the Comptroller's office would allow a national bank's subsidiaries to offer products and services prohibited for the parent. The agency shelved the proposal last year while Congress debated repealing the Glass-Steagall Act. That legislation would require banks to conduct securities activities in holding company subsidiaries.
"There are issues in this proposal that are very connected to issues in financial services modernization legislation, and we have to see how that all shakes out," Ms. Williams said.
The Comptroller's office also plans to streamline the application process for healthy national banks. Rules governing fiduciary activities, not updated since 1963, would be revamped to end restrictions on the way national banks pay trust customers withdrawing collective investment funds.