The Office of Thrift Supervision on Monday announced a new round of regulatory relief proposals, focusing on rules covering thrift subsidiaries, conflicts of interest, and corporate governance.

The agency is building on an effort launched a year ago as part of the federal government's campaign to "reinvent" itself. When it concludes work on the proposals made Monday, the OTS will have revamped 70% of its regulations, according to John Downey, executive director for supervision.

Mr. Downey said the agency plans to "drastically streamline" thrift investment and lending regulations over the next few months. These changes, which will expand thrift business lending, were proposed in January.

In addition to modifying rules, the OTS has decreased its demand for data required of thrifts by 40% and reduced the amount of time examiners spend in institutions by 15% to 20%, Mr. Downey said.

No new powers are being provided thrifts in the proposals announced Monday. Rather, said OTS Chief Counsel Carolyn Buck, the agency is clarifying what is allowed under the charter and making it simpler and cheaper for healthy thrifts to offer products and services.

The OTS is planning to consolidate six rules governing investments in subsidiaries. While a thrift still may only invest 3% of its assets in a servicing corporation, OTS plans to permit these subsidiaries to participate in any preapproved activitity after 30 days' notice. Right now, thrifts must file applications to offer any new product or service, approval for which can take two months or longer.

OTS also is simplifying the standards that determine when an institutions's loans to a service corporation count toward its investment limit.

The proposed regulation contains an updated five-page list of activities already approved for thrifts - such as foreign exchange, electronic delivery of welfare benefits, and maintaining and managing real estate. Pass-through equity investments, such as those in mutual funds, are being explicitly added to the list of approved powers.

The plan also includes a chart thrifts can use to compare the rules that apply to thrift subsidiaries and those relating to servicing corporations.

OTS is condensing into a new 54-word regulation its 306-word policy statement on conflicts of interest. The new rule explains that officers, directors, and other fiduciaries of thrifts may not advance their interests at the expense of the thrift. Gone are specific prohibitions, such as a ban on referring a thrift customer's insurance business to a director who is an insurance agent.

Finally, OTS plans to eliminate nine of the 33 rules governing how thrifts may operate. For example, the agency will no longer require a thrift president to be also a director and chief executive officer. In addition, rules in this area will be converted to less-rigid guidelines and updated to reflect advances in technology.

All three proposals will be published in the Federal Register within a week. The public will then have 60 days to comment on each.

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