If the California State Department of Banking has its way, big changes are in store for industry regulations.

With an eye on eliminating the outdated and cumbersome, the department may eliminate 90% of current regulations, according to Walt Mix, chief deputy superintendent of banks. Mr. Mix said his department would likely trim the current regulations from 400 pages to just 40.

"What has happened is that many of the regulations have built up over the years, like a coral reef," Mr. Mix said. "Unfortunately, no one noticed it was going on."

He said the concept is to delete or modify regulations that are unnecessary to determine safety and soundness of banks. The department has gone through every line of the rules and determined that most should simply be deleted.

The regulation-reduction drive is being conducted under Banking Superintendent Conrad Hewitt, whom Gov. Pete Wilson appointed just last year. Mr. Hewitt, who could not be reached for comment, said that when he was appointed regulation reduction would be something he'd concentrate on.

All proposed changes must be submitted to Gov. Wilson's office and the state Business, Transportation and Housing Agency, which oversees the banking department. Each must approve the changes before they can take effect, but Mr. Mix said he expects most to go through.

"We feel many of these changes are likely to benefit both banks and customers and will be able to get support," he said. "I would think we'll be able to repeal a very high percentage of the regulations."

The changes are the result of an executive order signed by Gov. Wilson in September that stated: "All state agencies are directed to review each of the nearly 28,000 regulations affecting the business sector," with an eye on repeal.

The order, an attempt to ease paperwork burdens on corporations, orders agencies to submit their recommendations to the governor's office by Dec. 8.

Among regulations slated for elimination are a requirement for delineation of compass points of new banking locations and descriptions of furniture to be used, its cost and origination.

Not surprisingly, bankers have applauded the proposed cutbacks.

"Any business entity likes to have less regulations," said Harvey J. Nickelson, chief executive officer and president of Coast Commercial Bank, in Santa Cruz. "I think some of the code goes back 100 years. There was a need to do this a long time ago, a need to come into the 20th century, if not the 21st century."

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