WASHINGTON - The Office of Thrift Supervision last week issued a bulletin outlining how small savings institutions can avoid the requirement for an annual independent audit.
The agency used to require annual independent audits of all the thrifts it regulates. But last November, in an effort to reduce the regulatory burden and bring its rules in line with those of the banking agencies, the OTS made audits optional for thrifts with assets under $500 million and Camel ratings of 1 or 2.
Small thrifts with lower Camel ratings, however, can request a waiver of the audit requirement. The agency explained in its bulletin that it may grant such a waiver if, for example, the low rating is due to concerns about management judgment "that are not readily reduced to objective criteria that can be audited in an effective manner."
The bulletin also rescinds several paperwork requirements having to do with thrift audits. Even with the changes, however, "the OTS rules are much more involved and intricate than those of the Federal Deposit Insurance Corp.," said Marti Sworobuk, a lobbyist for America's Community Bankers.