Magazine article American Banker

Mutuals Push Bills to Expand Powers, Earn Limited Support from OCC

Magazine article American Banker

Mutuals Push Bills to Expand Powers, Earn Limited Support from OCC

Article excerpt

Byline: John Reosti

WASHINGTON -- While many small banks are hoping Congress will grant regulatory relief this year, mutual institutions are seeking two specific changes they hope can bolster their struggling business.

Rep. Keith Rothfus, R-Pa., is set to introduce bills on Tuesday that would give certain thrifts the opportunity to make more commercial and consumer loans, as well as permit them to raise capital by selling investment certificates.

The first bill has already earned a nod from Comptroller of the Currency Thomas Curry, who said Monday that he strongly supported more charter flexibility for mutual thrifts.

"I strongly believe federal thrifts should be able to adjust their business models," said Curry during the American Bankers Association's Mutual Community Bankers Conference here. "We've had conversations with several members of Congress on this issue and the results have been encouraging...We'll continue to raise it as long as it takes."

Curry said the agency opposes the second bill, which would permit mutual banks to raise supplemental capital. At present, mutual thrifts can only raise capital through retained earnings. Curry said the OCC does not oppose the concept behind the bill, but fear that as currently structured it might not fully comply with capital standards under Basel III.

The Rothfus bills represent a dialing back of mutual thrifts' legislative ambitions from the last Congress. Rothfus introduced a bill in 2014 that would let mutual raise supplemental capital and establish a national mutual bank charter.

After the bill died in committee, banking executives and lobbyists rethought their strategy. They concluded the charter proposal was a longshot and that the smart play was to focus on initiatives with a more realistic chance of passage.

"We think we don't have that many bites at the apple," said Richard E. …

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