WASHINGTON - To kick off a major overhaul of the rules governing federally chartered savings institutions, the Office of Thrift Supervision has eliminated 8% of its regulations.
Effective today, gone is the requirement that every savings association publish an annual statement of condition in a newspaper. Also off the books are elaborate rules covering requests for savings account withdrawals and limits on selling merchandise to attract savings deposits.
In all, the thrift regulator is cutting from the Code of Federal Regulations 154 sections it considers outdated or redundant. Their demise was proposed in August and stirred no controversy.
But the thrift regulator will soon be delving into more sensitive issues. Slated for the coming months are revisions to rules in such areas as lending, subsidiaries, corporate governance, insurance sales, and adjustable rate mortgages.
"It will be substantive," promised G. Jeffrey Miner, OTS deputy general counsel. "We're not just looking to strip out outdated regulations. We're looking for new and less burdensome ways to achieve safety and soundness objectives."
The OTS rewrite comes in response to the Clinton administration's general regulatory review and to the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, which called for a reduction in regulatory burdens.
The other banking agencies are in the midst of similar efforts. The Office of the Comptroller of the Currency has even used its rules review to push for new national bank powers.
The OTS is likely to go about its revisions with more caution, however, because of the missteps of its predecessor, the Federal Home Loan Bank Board.
Seeking to help the thrift industry recover from financial problems in the 1980s, the bank board eased capital requirements, allowed for single- owner S&Ls, and liberalized accounting rules. Many observers have said these measures only exacerbated the problems, leading to more failures and a taxpayer-financed bailout.
"We're not going to do anything that's going to affect safety and soundness," Mr. Miner said. "Safety and soundness is always first, and that's the way it has always been at the OTS, because of the history at the bank board."
Due out in a month or two is a reworking of OTS lending rules. Gary Gilbert, lobbyist for America's Community Bankers and coordinator of that trade group's response to the OTS review, said he expects this to be "a combination of streamlining, eliminating, and relocating."
Further down the road, Mr. Gilbert said the rewrite of rules on subsidiaries should be of great interest to thrifts. Through subsidiaries, savings institutions are allowed to sell insurance with far fewer restrictions than banks.
"They are looking at ways they can make their subsidiary regulations more useful and usable by the industry - without compromising safety and soundness, of course," Mr. Gilbert said.
Overall, he added, "We're very positive on what they're doing."
