The Michigan Financial Institutions Bureau has slashed its fees and, in some cases, dropped them altogether.

Bank application rates were trimmed 40%, and the state now claims to charge 68% less than the Office of the Comptroller of the Currency for processing a bank's request.

"This was an internal effort to look at our processes, figure out the cost, and adjust our fees accordingly," said Russell Kropschot, chief deputy commissioner of the bureau. "We try to bill banks based on what we think our costs are."

Every few years the bureau evaluates its services with an eye toward reducing costs. This year, the application forms themselves were reworked and made simpler. The reduction in paperwork has saved both the state and banks time and money since the new rates took effect in late October. The last such update occurred in 1992.

Michigan's charge for a new bank application is now $6,200, down from $9,000. The OCC currently charges $14,300 for a new bank application. The fee for a consolidation application has been shaved $400 to $1,800. The OCC's going rate is $6,200. The charge for a bank to convert to a state bank from a national bank also has been lowered to $1,300 from $2,200.

The state also has changed its policy on the establishment of new branches and the relocation of principal offices, cutting the fee and publication requirement for both. Gone is the $1,000 fee. Now a bank simply has to notify the commissioner's office of its intent to branch. A branch application to the OCC costs $700.

"Instead of an application, a bank can just tell us in as little as a page what they plan to do," said Mr. Kropschot.

As of Dec. 31, 1995, there were 138 state banks in Michigan with total assets of $61 billion. There are 44 national banks in the state with assets approaching $58 billion.

"With the removal of paperwork and the corresponding drop in fees, we feel the Financial Institutions Bureau is acting very responsibly," said Don Heikkinen, senior vice president and staff counsel for the Michigan Bankers Association. "We've been supportive of the FIB all the way, and applaud these efforts."

Mr. Ketelaar is a student in the Washington Semester Program at American University.

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