A new banking bill that has already won approval from the State House
of Representatives could mean expanded powers for state bank regula
tors working to turn troubled institutions around.
House Bill No. 1339 has the support of State Banking Commissioner
R.Y. Empie and the Oklahoma Bankers Association.
The expanded powers would give the Commissioner and the Banking
Board powers almost equal that of federal bank regulators.
A key feature of the new bill is a provision allowing the
Commissioner to issue cease and desist orders, which he cannot do
now. The commissioner's enforcement powers would also include an
injunction or a fine.
Empie said he hopes being able to issue cease and desist orders
will enable him to act more quickly to correct problems at troubled
Such orders issued by federal regulators often arrive when
problems are beyond remedy, he said.
"If I had the power to issue and desist order," said Empie, "I
could do it more promptly and it would be more pin-pointed. That's
better than waiting and lowering the boom with a 30-page order that's
Such orders are "for the purpose of helping banks," said Empie.
"There's no penalty or fine. It's just one of the stronger things we
have to get their attention and require them to institute corrective
Another key feature concerns expaned powers to order removal of
bank officers, directors or employees.
At present, executives at state banks can only be removed if they
violate the State Banking Code. The new law would enlarge that to
- Violation of any federal banking law, regulation or order.
- Participation in any unsafe or unsound practice in connection
with a bank or trust.
Empie pointed out that the change would bring Oklahoma up to date
in terms of enforcement since "most of the new banking laws of the
last eight years have been at the federal level."
The area of unsafe and unsound banking practices, although not yet
specifically defined, would include abuses in the all important area
of lending - such as ignoring a bank's lending policies, selling too
many participation loans, speculative loans, abuse of insider lending
At present, Empie is unable to take action against individuals for
Lending abuses are the most common and most dangerous problems
found at troubled institutions, Empie indicated. The new "unsafe and
unsound" provision is intended to be the title which will take inthe
whole catalog of improper lending activities.
One of the biggest motivations for expanding powers at the state
level are structural changes in the works at the federal level, said
"I'm just trying to avoid having to fall back on federal
regulators to regulate state chartered banks," said Empie. …