TAHLEQUAH — email@example.com
The transformation of the Oklahoma Banking Department into a self-funded sector and a process to streamline banking operations are among the achievements Mick Thompson has tucked under his belt.
Thompson, who has served as Oklahoma banking commissioner since Sept. 1, 1992, spoke to the Tahlequah Rotary Club during its weekly meeting Tuesday at Go Ye Village. He gave a short presentation explaining the responsibilities of the OBD before explaining major changes he’s made.
Under his watch, the state’s 50 national banks were converted to the state system, and there were no bank failures between 1992-2009, though three state banks have failed since.
Thompson also pointed to the reduction of assessment costs, which banks pay to operate within Oklahoma’s system, as among the most important accomplishments during his tenure.
“When I came into the department, we would assess the banks, they would pay the money, then it would go to the general revenue fund and we would beg for part of it back,” he said. “I told the Legislature that was an additional tax on banks and that they should not be funding other services through bank assessments. They were keeping about 40 percent of what the banks paid.”
With the assistance of former Oklahoma Sen. Herb Rozell, Thompson achieved self-funding for the banking department.
“Since then, we have never raised assessments, and we lowered assessments two years ago by 22 percent,” he said. “Last year, we reduced it by another 15 percent. Banks paid 23 cents per $1,000 of assets in 1992. They now pay 14 cents per $1,000.”
State trending toward economic and financial optimism
While presenting data, Thompson said Oklahoma’s trends are cause for economic and financial optimism. State unemployment is at 5.2 percent, while 7.6 percent nationally. Gross receipts are approaching their level in 2008 and building permit requests are rising long-term.
Bank asset growth in Oklahoma has been steady. While 4 percent of Oklahoma banks did not turn a profit, the figure was 8 percent nationally.
Thompson stressed the need for banks to maintain a presence in small towns, but said there are challenges. For one thing, there’s been a 49.33 percent reduction since 1992 in the number of institutions operating in Oklahoma. Some are due to mergers, but Thompson said an issue in rural Oklahoma can be a bank’s successors.
Thompson said a local bank often offers some of the best jobs in a small town, and that the institutions are intertwined with and indispensable to their communities.
“I said we only closed three banks in 21 years,” he said. “There were others that probably could have closed, but I was able to market the bank - which was unusual for a regulator, and find a buyer who could keep that bank open in a small community.”
In the aftermath of the tornadoes in the Oklahoma City area this past spring, local banks were part of a massive multi-dimensional effort to help victims get access to cash.
“I got on the phone with the Oklahoma Insurance Department,” Thompson said.
“We called banks and they brought in mobile ATMs. Community banks stood up. It was an example of what I wish Congress could do. Two different state agencies, several state and national banks, and the Federal Reserve all worked together to help people.”
Thompson voiced disapproval of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law in 2010 but is still undergoing implementation. Through mid-2013, 175 of 279 deadlines have been missed.
“The bill is 13,000 pages long,” Thompson said. “I bring it up because everyone will have to comply. This is a bad deal for rural community banks who had nothing to do with the Wall Street collapse. Once all this is implemented, you will not be able to go into a bank and do what you’ve been able to do for the last 50 years. The customers will not be happy.”