Magazine article American Banker

OTS Proposes Streamlined Regulations on Subsidiaries

Magazine article American Banker

OTS Proposes Streamlined Regulations on Subsidiaries

Article excerpt

The Office of Thrift Supervision on Monday announced a new round of regulatory relief proposals, focusing on rules covering thrift subsidiaries, conflicts of interest, and corporate governance.

The agency is building on an effort launched a year ago as part of the federal government's campaign to "reinvent" itself. When it concludes work on the proposals made Monday, the OTS will have revamped 70% of its regulations, according to John Downey, executive director for supervision.

Mr. Downey said the agency plans to "drastically streamline" thrift investment and lending regulations over the next few months. These changes, which will expand thrift business lending, were proposed in January.

In addition to modifying rules, the OTS has decreased its demand for data required of thrifts by 40% and reduced the amount of time examiners spend in institutions by 15% to 20%, Mr. Downey said.

No new powers are being provided thrifts in the proposals announced Monday. Rather, said OTS Chief Counsel Carolyn Buck, the agency is clarifying what is allowed under the charter and making it simpler and cheaper for healthy thrifts to offer products and services.

The OTS is planning to consolidate six rules governing investments in subsidiaries. While a thrift still may only invest 3% of its assets in a servicing corporation, OTS plans to permit these subsidiaries to participate in any preapproved activitity after 30 days' notice. Right now, thrifts must file applications to offer any new product or service, approval for which can take two months or longer. …

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