WASHINGTON — Thrift executives are complaining that a federal proposal to increase holding company oversight would delay acquisitions or other deals and raise their cost.

“It is not so much that it would stop product and service arrangements, but it would slow down the process,” said Curtis L. Hage, chairman, president, and chief executive officer of $723 million-assetHome Federal Savings Bank of Sioux Falls, S.D. “And in a fast-paced world, you need to be able to respond more quickly to business opportunities, to changes in the marketplace, to competitive disadvantages that you might experience, and the regulatory process is one that is relatively insensitive to market forces.”

He said, for example, if the plan adds as little as a month to the amount of time it takes to acquire a business, thrifts would be “out of the game” and lose out to nonthrift competitors that could complete a deal faster.

Under the proposal issued Oct. 27 by the Office of Thrift Supervision, most thrift holding companies would have to give 30 days’ notice before significantly increasing their debt, substantially reducing their capital, or making acquisitions that exceed 15% of assets, to ensure that they are not putting their banking affiliates at risk. Public comments are due Dec. 26.

OTS Director Ellen Seidman has said that the proposal actually would benefit the industry because regulators would be familiar with deals prior to application and be able to approve them quicker.

But industry officials — who raised concerns about the proposal last week at America’s Community Bankers’ annual convention in Seattle — predicted the opposite.

“My initial reaction is that the proposal is too broad in scope and goes beyond where the OTS had to go to get to the issues they are concerned about,” said Diane E. Casey, president and chief executive officer of the banking group.

She urged the agency, instead, to craft a narrower proposal that would govern the specific interactions between parent companies and any of their thrifts that it may be concerned about.

Mr. Hage said further oversight would be unnecessary because other regulators, such as state insurance commissioners, are already looking over the shoulders of holding company executives to keep tabs on other parts of their business.

However, Ms. Seidman said in a speech at the convention on Oct. 31 that her agency is the most qualified to examine such holding companies. The agency “has far more experience, over a far more diversified range of companies, than any other regulator,” she said.

Still, Mr. Hage said he is concerned that the proposal casts all thrift holding companies in a negative light, implying that they are all “potentially high-risk and need to have regulatory oversight.” The 30-day warning is not necessary, he said, because regulators already have the authority to investigate questionable activities.

Thrifts are also concerned because they have little time to complete transactions in the capital markets or with government-sponsored enterprises, said E. Lee Beard, president and chief executive of $645 million-asset First Federal Bank and its parent company, Northeast Pennsylvania Financial Corp., both based in Hazleton, Pa.

“If you decide you are going to incur debt, you have got a fairly short window, depending on the markets, to go ahead and do that,” Ms. Beard continued. “You cannot wait a long time.”

Holding companies may have only two or three days to raise funds, depending on how the markets are moving, she said. “If you need to borrow from the Federal Home Loan Banks, even if it is significant, sometimes all you have is a few days before rates move.”

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