Magazine article American Banker

OCC Winning over Once-Wary Mutuals

Magazine article American Banker

OCC Winning over Once-Wary Mutuals

Article excerpt

Byline: Andy Peters

Mutual thrift defections from the Office of the Comptroller of the Currency should decline now that once-nervous bankers have gotten a chance to get familiar with the regulator.

Several mutuals switched to state charters because of the July 2011 dissolution of the Office of Thrift Supervision. Mutuals that chose to stick with the OCC seem to have fewer concerns now, says Susan Ralston, president and chief executive of Bank @LANTEC, a $102 million-asset mutual thrift in Virginia Beach.

"There was some fear that they wouldn't understand us," Ralston says. "When the OCC came into my bank, they said we were welcome to stay a mutual for as long as we wanted. ... I hear from most of my peers that things are going pretty well."

When the Dodd-Frank Act abolished the OTS, the prevalent concern was that the OCC would struggle to understand the idiosyncrasies of mutual thrifts, including dividend waivers and limitations to raising capital.

Defections are likely to come to a halt, says Richard Schaberg, a lawyer at Hogan Lovells. "People by now have gone through a full examination cycle and worked out the kinks," he says.

Bank @LANTEC, a former credit union, had considered a state charter, largely because of potential cost savings. The thrift decided against switching, expressing comfort with its federal charter. The OCC "integrated some of our old examiners into the" exam process, Ralston says.

When the OTS was abolished, more than 670 OTS employees were moved to the surviving agency, ensuring continuity, says Donna Deale, the OCC's deputy comptroller for thrift supervision.

"It's easy to assume we didn't adequately understand mutuals," Deale says. "A lot of staff came over that had experience with mutual institutions."

The appointment of Thomas Curry as comptroller of the currency, also helped ease the nerves of thrift CEOs, says John Bowman, former acting director of the OTS. …

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