Responding to concern that Congress may eliminate federal thrift charters, Michigan has become the 30th state to create a state savings bank charter.

The new charter, permitted under a law signed by the governor this month, would be a way for the state's 27 federally chartered thrifts to keep their traditional focus on mortgage lending, and even remain mutual, regardless of federal legislative changes.

"I think it's a great opportunity to revitalize our industry to make sure savings institutions have a home to go to no matter what happens with Congress," said Robert G. Howell, president of the Michigan League of Savings Institutions.

With this move, Michigan joins several other states that have established savings bank charters since the 1989 thrift bailout legislation, when many thrifts started to flee federal agencies for state regulators.

Michigan already had an outdated savings and loan charter, but it fell out of favor in recent years, and now no Michigan savings institutions are state-chartered. The new savings bank charter offers expanded powers and flexibility, said Patrick M. McQueen, commissioner of the state's Financial Institutions Bureau.

The charter also provides the opportunity to fully exit from Office of Thrift Supervision regulation.

Switching from a federal thrift charter to a state savings and loan charter makes the state the thrift's primary regulator. But the OTS remains its secondary regulator, according to a spokesman for that agency.

However, under a state savings bank charter, the Federal Deposit Insurance Corp. becomes the secondary regulator.

"It's a nice option," said John Schroll, president of $104 million-asset Branch County Federal Savings and Loan Association, Coldwater. If the Office of Thrift Supervision "doesn't lighten up, we'll probably change."

The charter is an option for institutions insured by either the Bank Insurance Fund or the Savings Association Insurance Fund, and allows the institutions to be either stock or mutual.

The new charter has been billed as flexible in its requirements, offering a commitment to mortgage lending but with more room for other types of lending. At least 50% of an institution's assets must be in mortgage-related loans and investments, compared with savings bank charters in other states, which typically require at least 60% mortgages, Mr. Howell said.

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