Federal Bank Disclosure Plan Criticized by Oba's Pringle

Article excerpt

The most extensive disclosure plan proposed by any federal bank regulator has drawn sharp criticism from Laura N. Pringle, vice president and general counsel of the Oklahoma Bankers Association.

The regulation, proposed in October 1985 by then-Comptroller C.T. Conover, is twofold, she said.

- First, it would put national banks on a reporting system modeled after federal securities reporting requirements. If adopted, the banks would submit yearly, quarterly and current reports to the Comptroller, rather than quarterly reports as they do now.

- Second, it would require public disclosure of all enforcement orders issued by bank examiners. And if a bank has been notified by the Comptroller's office of the intent to take administrative action, that would also have to be disclosed.

If approved, Pringle said the rule would be effective January 1987. The first annual report of a bank to be affected would be that of 1986.

The Comptroller of the Currency examines and regulates national banks. State-chartered banks are regulated and examined jointly by the Federal Deposit Insurance Corp. and the Oklahoma Bank Commmissioner. The Federal Reserve Bank regulates state-chartered, member banks.

Regulators do not use all information that is reported now, Pringle testified Oct. 9 in a Chicago public hearing conducted by Comptroller of the Currency Robert L. Clarke.

Representatives of bankers associations in Kansas, Texas, Illinois, Nebraska and the American Bankers Association also testified.

"We in the industry think rather than an increase in reporting requirements, in most cases regulators can do the most effective job by honing in on information most needed for regulatory purposes -and decreasing reporting requirements for virtually all banks," she said.

Banks are willing to provide the information agencies need to effectively regulate, Pringle added, "but not volumes of information that's unnecessary or that the regulators already have."

The cost of the stepped-up requirement has bankers concerned, she said.

"Many banks are formed purposely keeping the amount of shareholders below reporting requirements," Pringle said. "It's not to avoid disclosure - they have to make disclosure to their shareholders,anyway - but to avoid the continuing cost of securities reporting requirements."

As to disclosing enforcement orders, Pringle said OBA members see no reason for there to be public disclosure to non-investors.

"If the rest of the information is not carefully studied, it may lead to a run," she said. …