WASHINGTON - Community bankers are pleased with the Office of the Comptroller of the Currency's new simplified exam procedures for small, "noncomplex" national banks.
At least that's what they told examiners who questioned them after exams conducted under the new procedures.
Executives at 83% of the 725 banks examined under the procedures between Oct. 1, 1994, and June 30 said the new exams were less burdensome than the old ones.
Seventy-five percent of the bankers surveyed said they spent less time preparing materials requested by examiners, 79% said examiners took up less of the bank staff's time with discussions, and 87% said examiners were more focused in their review of bank activities, according to the Comptroller's office.
Comptroller of the Currency Eugene A. Ludwig hailed the results as evidence that his agency is making progress in reducing banks' regulatory burden.
"The OCC is improving efficiency, eliminating unnecessary burdens on banks, and increasing attention to areas that pose the greatest risks to the stability and health of the banking industry," he said.
One banker who has been through the new exam agrees that it is an improvement.
"The paperwork was greatly reduced," said Jack W. Dickey, president of $38 million-asset First National Bank of Thomas, Okla. "It seemed to be much more efficient and saved all of us a lot of time."
Mr. Dickey said examiners focused their energy on scrutinizing his bank's larger lines of credit, and relied on the bank's internal loan reviews to evaluate its small-loan portfolio.
To qualify for the streamlined exams, banks must have assets under $1 billion and a Camel rating of 1 or 2, and must offer "few or limited nontraditional products." Most of the banks that have undergone the new exams have assets of less than $100 million.
Under the new procedures, examiners can collect only 35 standardized items from banks - down from 200. The exam guidelines for noncomplex community banks have been pared from 1,216 pages to 30.
Mr. Ludwig said more streamlining is on the way.
"As a result of the first year's experience with the new procedures, we will make some additional revisions to improve the effectiveness of all examinations without sacrificing fundamental safety and soundness standards or compromising legal and regulatory requirements," he said.
