The get-to-know-you process between the Office of the Comptroller of the Currency and mutual thrift continues to be a work in progress.

Roughly a third of mutuals believe their regulators lack a good understanding of how the industry conducts business and how their structure works, according to a survey released Monday by the American Bankers Association as part of its annual mutual community bank conference in Washington.

Broken down by agency, the OCC had the worst showing among mutual when compared against the Federal Deposit Insurance Corp. and the Federal Reserve Board. The findings come almost two years after the Office of Thrift Supervision —once the primary regulator for a large number of mutual thrifts — was absorbed by the OCC.

The ABA has made a concerted effort to improve relations between mutuals and their regulators, says Robert Davis, an executive vice president at the association. "Two things are very important — one is working with the regulators on the examination process, both with respect to training examiners and to understanding the mutual," he says. "The second is creating opportunities for more capital flexibility."

The survey's findings were based on responses from 175 mutual institutions, with about half of those holding less than $500 million of assets. The respondents were about equally divided between state and federally chartered mutuals.

From the OCC's perspective, the agency continues to make strides on its relationship with mutuals, says Jennifer Kelly, senior deputy controller for midsize and community bank supervision. The OCC has established committees, such as the mutual advisory committee, and special programs to bridge the knowledge gap, she says.

"We continue our cross-credentialing process, so our examiners can lead the examinations of thrifts" and sign off on the final exam report, Kelly said during the conference.

Aside from the OCC, mutuals institutions are worried about fallout from the proposed Basel III rules. About 54% of the survey's respondents said they are "concerned' about Basel III, particular as they grapple with raising adequate capital.

"As things are coming down now with Basel III, it's going to impact mutuals more than anyone else because of our inability to raise capital," says George Hermann, president and chief executive of the $391 million-asset of Windsor Federal Savings & Loan Association in Connecticut. "We have to have lines of communications" open with regulators.

The survey also found that 62% of respondents have recently considered merging with another mutual. Excess liquidity remains a concern, as 60% of respondents said their specific mutual bank has "too much" liquidity.

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