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Reforms outlined for US financial institutions

An administration task force has endorsed a package of about 30 regulatory reforms for financial institutions, including more state control of banks and thrift institutions and federal regulation based on their functions rather than their charters.

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Put off until later was the bigger question of consolidating financial regulations among the three agencies that now divide authority over banks and thrifts. After review by the Cabinet Council on Economic Affairs and approval by the President, the package will be submitted to Congress.

The categories covered by the proposed reforms include eligibility for thrift institution status, reform of the federal deposit insurance system, federal and state duplication of regulatory functions, and elimination of unnecessary regulatory controls.

Among specific reforms is a requirement that institutions maintain a minimum percentage of overall assets in home loan funds to be eligible for regulation as a thrift institution.

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