WASHINGTON - The Office of the Comptroller of the Currency is inviting bankers to weigh in on whether its regulations are helping or hindering the growth of Internet banking.
In a notice released Tuesday, the agency identified several broad areas of concern and asked if its regulations are flexible enough to adapt to evolving electronic banking practices, and whether operational restrictions such as marketing and branching limits have unintended effects on banks' on-line activities.
The notice, due to be published in the Federal Register today, seeks comment from bankers and other interested parties by April 3 that could serve as the basis for proposing an update of OCC regulations.
"We are doing it to gather information, to enhance our understanding of the areas where bankers think use of the Internet either is today, or will be in the future, most significant for their operations," OCC Chief Counsel Julie L. Williams said in an interview. "We want to know what kinds of products and services they think they are most likely to offer using an Internet or other remote delivery mechanism."
The document asks those filing comments to "describe how national banks want to use new technologies and how these technologies will impact the ways in which [they] operate under the OCC's current regulations." It requests respondents to identify specific rules that may inhibit the use of new technology. Specifically excluded from the scope of this inquiry, however, are issues relating to privacy and the Community Reinvestment Act.
The OCC may need to reinterpret certain statutes as Internet banking becomes more prevalent, the document notes. Specifically, it refers to statutes - such as director residency requirements - that pertain to the location of an institution or its branches. The document asks commenters "to address how 'location' applies in the context of activities conducted via the Internet."
Currently, the OCC limits the extent to which banks can share physical space and employees with other organizations, to prevent confusion about the types of products and services both offer. The OCC asks whether it needs to adopt a similar rule to address the use of "hotlinks" on banks' Web sites that direct Internet users to other organizations, and vice versa.
Finally, the document notes that current law allows banks to let customers process transactions through third-party automatic teller machines and affiliated banks and thrifts without violating branching restrictions. The OCC asks if these regulations are sufficient to allow customers of "technology-based" banks to make deposits and transact other business expeditiously.
The OCC has not yet formulated a proposed rule on the subject of electronic banking, and will rely heavily on bankers' feedback if it does, Ms. Williams said.
