WASHINGTON -- Thrifts that do not rate among the best in management and capital safety may make more character loans, the Office of Thrift Supervision said Tuesday.
Bank regulatory agencies have already allowed institutions rated 1 or 2 -- the top two of their five overall soundness ratings -- to make a limited amount of loans without the usual supporting documentation.
OTS will now allow institutions rated 3 on its "Macro" scale to make character loans, with prior approval from a regional OTS director.
OTS this week is sending institutions it regulates Thrift Bulletin 61, which describes the new policy. It is effective immediately and is linked to the Clinton administration's attempts to encourage lending.