WASHINGTON -- Small, healthy thrifts will be exempt from annual independent audits under an Office of Thrift Supervision rule that takes effect Dec. 23.
Thrifts with less than $500 million of assets -- which is roughly 80% of the industry -- could save from $20,000 to $50,000 a year under the new rule.
The thrift trade group praised the move. "We're pleased to see this because it levels the playing field for OTS-supervised institutions," said Marti Sworobuk, the program manager for financial management and accounting at the Savings and Community Bankers of America.
"The change promotes comparability and consistency among federal banking agencies by making the audit rules for savings associations more consistent with those for commercial banks," the OTS said in it statement last week.
Small thrifts must receive a camel rating of 1 or 2 to qualify for the exemption. The OTS also will exempt from the annual audit requirement holding companies whose subsidiary savings associations have less than $500 million of assets.
"The institutions that will take advantage of this are the smallest OTS-supervised institutions whose operations are fairly standard and those subsidiaries of bank holding companies who are audited through the bank holding company level," SCBA's Ms. Sworobuk predicted.
The other banking agencies have already exempted small banks from the annual independent audit requirement. The Office of the Comptroller of the Currency acted earlier this year, and the Federal Deposit Insurance Corp. issued its audit rule in June 1993.
Healthy, small thrifts will still be examined at least every 18 months, if not every year, OTS officials said. But as long as they remain healthy, they might never be required to have a full-blown independent audit, an OTS official said.
Nevertheless, the rule change is not intended to discourage smaller, healthy institutions from having an independent audit performed, the agency stressed in a statement. Management may still choose to have the thrift audited.
"Many institutions will still keep conducting an independent annual audit, since operations may be of such a sophistication that senior management and the board of directors find the audit information beneficial to the bank," Ms. Sworobuk said.