Regulators are warning thrifts to make sure they have controls and qualified people in place as they venture into commercial and nonmortgage consumer lending.

"Typically, the home mortgage lending business has been relatively low risk," said John F. Robinson, director of the Office of Thrift Supervision's West region, based in San Francisco.

But, he said, as thrifts look to bolster their profits by diversifying out of low-yielding mortgages and into higher-yielding loans, they are taking on new risks.

Mr. Robinson said he had been meeting with small groups of chief executives from thrifts to warn them that "the fastest way in the world to get into trouble is with risks you don't understand."

Mr. Robinson said he was telling the CEOs to be sure "they have people in place that know what they're doing and controls in place to minimize the risk."

Meanwhile Richard A. Sanchez, deputy regional director of the OTS, planned to tell chief financial officers in a closed meeting organized by the Western League of Savings Institutions that their boards also should be better equipped to oversee the new ventures.

"From what we've seen, people could probably be a little more careful, and boards could be more involved in the process and lay out what their expectations are," Mr. Sanchez said. He said the OTS would like thrifts to augment their boards with members who have expertise in the new business lines.

The last time thrifts entered new business lines in a big way was the mid-1980s, when Congress gave thrifts significant new powers. Back then, Mr. Sanchez said, few thrifts hired to obtain the skills they needed - and when some did "it was the worst people in the banking industry who came over."

Bad loans and poor management - along with interest rate volatility - led to the thrift debacle the OTS was formed to deal with.

The good news this time around, Mr. Robinson said, is that the consolidation of big banks has resulted in an abundant supply of qualified commercial bankers.

For example, he said, even if small and midsize thrifts cannot attract top managers leaving First Interstate, they might pick up local and regional executives who weren't taken by the acquirer, Wells Fargo.

The OTS is beefing up its examination skills to meet the new regulatory challenge, Mr. Robinson said. OTS examiners have accompanied Federal Reserve Bank examiners on commercial bank exams and are taking training courses.

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