Newspaper article THE JOURNAL RECORD

Banks Not Using Oklahoma's Lending Cap, Survey Says

Newspaper article THE JOURNAL RECORD

Banks Not Using Oklahoma's Lending Cap, Survey Says

Article excerpt

Despite allegations voiced by federal banking officials, only a relative handful of Oklahoma's state-chartered banks take full advantage of the state's high lending limit, according to Banking Commissioner Mick Thompson.

A survey commissioned by the Banking Department to determine how many banks have approved loans in amounts near the state cap (30 percent of a bank's capital) found that 49 percent have no loans worth more than 20 percent of the bank's capital. The survey also showed that 83 percent of Oklahoma's state-chartered banks have three or fewer loans worth more than 20 percent of bank capital.

Of the 17 percent of banks that have approved loans worth more than 20 percent of capital, only 2 percent have approved more than five of those loans, Thompson said. He said those banks are the only institutions where Oklahoma's loan cap played a significant role in the decision to obtain a state charter rather than a federal charter.

We talked to some of those banks and it (Oklahoma's 30 percent cap) was a pretty important issue to them, Thompson said.

However, he said most banks have chosen not to take advantage of the state's high loan limit and remain in the state system for other reasons.

Most banks have internal limits that are such that they are lower than the state loan cap, he said.

The survey was sent to 186 banks, with 130 responses obtained.

The survey was commissioned following published comments by John D. Hawke Jr., federal comptroller of the currency, that suggested many Oklahoma banks were converting to state charters due to the higher lending limits allowed. While the cap for Oklahoma banks with national charters was 15 percent of bank capital, Oklahoma law has allowed state-chartered banks to approve loans worth up to 30 percent of capital since 1997. The limit is one of the highest in the country.

Officials with the Comptroller of the Currency have been critical of Thompson and Oklahoma's state banking system because of the number of banks with a national charter that have converted to state charters in the last few years. …

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