WASHINGTON -- A key federal regulator raised warning flags Monday about the Federal Deposit Insurance Corp.'s new plan to overhaul the way mutual savings banks sell stock for the first time.

Jonathan L. Fiechter, an FDIC board member and the acting director of the Office of Thrift Supervision, said he had "strong reservations about various aspects of the proposal," which permit converting mutuals to give away much of their net worth. Mr. Fiechter's remarks came in a Monday speech to the Kansas-Nebraska League of Savings Institutions in Kansas City, Mo.

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