ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release May 25, 2006 #06-30
E-mail: [email protected]

ACB STRONGLY SUPPORTS OTS AS FEDERAL REGULATOR OF INSTITUTIONS PROVIDING CONSUMER FINANCIAL SERVICES

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WASHINGTON, D.C. — America’s Community Bankers strongly supported the Office of Thrift Supervision today as a federal regulator with the expertise and tools to supervise savings institutions that provide consumer financial services.

Testifying before the House Financial Services Committee’s Oversight Subcommittee, Michael Nolan, a member of ACB’s board of directors, said: “ACB supports the continued operation of the OTS as an independent regulator. The efficient and professional regulatory oversight provided by OTS is critical to the continued vibrancy of a segment of the financial institutions industry with a special focus on home lending, retail banking and a commitment to communities.” Nolan is also chairman, president and CEO, Fifth District Savings Bank, New Orleans.

“The OTS has undergone a successful evolution that mirrors the evolution of the industry it regulates,” Nolan said. “The agency currently supervises a wide range of institutions with different operating strategies, business needs, sizes and charters. Over the years, the industry has become more complex and diverse, and the OTS has kept pace with the change.”

He said OTS, in addition to implementing stringent safety and soundness regulation, “has taken a leadership role in providing operational flexibility and relief for community banks from increasing regulatory burden.” As an example, Nolan cited the “invaluable assistance to me, my colleagues and competitors” rendered quickly by OTS in the aftermath of Hurricane Katrina.

“The guidance that was issued in the early days after the storms was very helpful in providing comfort that there would be a more sensible approach when examiners came in. We received assurances from the OTS that such flexibility would be forthcoming,” he added.

“We appreciate particularly the recognition by OTS that compliance with many regulations, when our institutions were under severe stress, would have been almost impossible. OTS relieved our banks of many of the regulatory burdens that normally accompany the transacting of routine banking business, such as the transfer of funds on behalf of our customers. Without this flexibility, we would not have been able to help our customers when they needed our help the most.

“I believe that this is a lesson that we can take away from this disaster, namely, that when banks are relieved of unnecessary regulatory burden, they are better able to serve the needs of their customers.”

Nolan said the OTS has years of experience in supervising savings institutions that are primarily home mortgage lenders, as well as thrift holding companies and mutual thrifts.

“OTS has been a leader among the agencies in looking at underwriting standards and risk management at those institutions that offer alternative mortgage products,” he said, commending OTS for its role in developing the recent proposed interagency guidance.

Nolan cited OTS’s experience in working with holding companies whose parents are financial services companies, as well as other types of entities. And he noted OTS’s understanding of the unique nature of the mutual charter.

Nolan deplored the restrictions placed by the National Credit Union Administration on credit union conversions to mutual savings bank charters. “By allowing charter conversions, we allow our financial system to evolve and grow stronger,” he said.

Click here for the testimony.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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