The Office of Thrift Supervision, uncertain how to regulate electronic banking, is turning to the industry for guidance.
The agency Monday became the first regulator to solicit comments officially on a broad array of electronic banking issues. A notice is to be published Wednesday in the Federal Register and replies are due by early June.
Technological advances such as automated loan machines and home banking are unstoppable, OTS Director Nicolas Retsinas said. So the agency wants thrift executives to suggest whether it should adopt or rewrite rules in order to mention these emerging technologies explicitly, he said.
The OTS' questions are focused on three areas:
Should the exclusion of automated teller machines from branching rules be extended to similar machines that dispense loans?
Should thrifts have to adopt security standards for home banking, and how might Community Reinvestment Act standards apply to institutions that span the country electronically?
Could limits that prevent thrifts from outsourcing more than half their data processing services bar them from selling Internet services or financial software?
In addition, the OTS inquired whether regulations are necessary to govern smart cards or the use of artificial intelligence for credit scoring.
Officials sought to dispel any impression they would stifle development of electronic commerce with a heap of rules. The agency intentionally chose to make an open-ended call for suggestions instead of a detailed proposal in order to encourage collaboration with thrifts, officials said.
"Washington doesn't always know better," Mr. Retsinas said.
Thrifts should point out any current rules that are too restrictive, officials said. "One of the things we specifically want to do is avoid being an impediment to electronic banking," said Paul D. Glenn, an OTS special counsel.
The agency has stepped forward on electronic policy issues before. Two years ago, it granted the first federal charter to an Internet bank, Security First Network Bank.
All bank and thrift regulators are trying to stay ahead of changes in technology without harming its development. For example, the Federal Reserve Board is mulling changes on Regulation E, the Comptroller's Office is leading a Consumer Electronic Payments Task Force, and the Federal Deposit Insurance Corp. in January became the first regulator to issue examiner guidelines for electronic banking.