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The Office of Thrift Supervision, acting on a recommendation of America’s Community Bankers, is allowing savings associations to be more competitive by eliminating restrictions on repurchase obligations.

In a Federal Register notice, the OTS confirmed the May 30 effective date of the direct final rule it published in March. ACB had petitioned OTS to repeal the regulation and strongly supports OTS’s rulemaking. OTS said it received no written adverse comments.

The regulation being repealed prohibited savings associations from issuing repurchase agreement obligations in amounts under $100,000 and with a maturity of 90 days or more, unless the obligation was issued to an FDIC-insured institution or a broker or dealer registered with the Securities and Exchange Commission. Other depository institutions do not face the same requirements.

ACB said that eliminating the regulation would help savings associations remain competitive by allowing them to offer sweep accounts using repurchase agreements. This is particularly important to smaller associations that use sweep accounts in their cash management programs.