Bankers Would Change ‘Silly’ Rules Governing Some of Their Activities : BANKING/FINANCE

California bankers sometimes wonder why some of their simplest marketing plans are subject to regulatory scrutiny.

Sunwest Bank in Tustin, for instance, wants to set up an information booth at an Oct. 20 business development conference sponsored by State Sen. William Campbell (R-Hacienda Heights) in the City of Industry.

The annual conference, aimed at helping primarily small, minority-owned businesses, “draws a tremendous amount of people,” said William J. Mylymok, president of Sunwest Bank. He figures the exposure for his bank would be good for its business.

But under state banking laws, a booth at the one-day conference is construed as a “new place of business” and requires regulatory approval from the California Department of State Banking.

“That’s so dumb, isn’t it,” said R. Blair Reynolds, senior vice president and general counsel of the California Bankers Assn., a statewide industry trade group. “The regulators think it’s dumb too.”

The statute requiring such state approval is a law the state banking agency could live without, said James Carrig, the agency’s chief counsel.

For more than two years, the bankers association has been reviewing and rewriting the state’s banking laws. It plans to ask legislators early next year to adopt its rewritten banking code, Reynolds said.

The proposal, he said, would eliminate the need for banks to run to regulators for approval of such things as information booths and minor changes in a bank’s bylaws.

Although the new code would not eliminate the wealth of regulation already on the books, it would modernize the language and remove the “silly” stuff, Reynolds said.