The Oklahoma Banking Department is one of just a few state agencies originally authorized by the Oklahoma Constitution in 1907.
OKLAHOMA CITY - Phenomenal growth in assets of state-chartered banks has the Oklahoma Banking Department eagerly awaiting construction of a new office building. Bids on construction of an annex near the department’s headquarters on the northeast side of Lincoln Boulevard at 28th Street in Oklahoma City, six blocks north of the State Capitol, are scheduled to be opened July 25.
Previously the department leased space in the old Lincoln Plaza complex on N. Lincoln. Unfortunately, “Our board room there flooded just about every time someone flushed a toilet on a floor above us,” Banking Commissioner Mick Thompson recalled. So, 12 years ago the department dipped into its reserves and constructed an 8,000 square-foot headquarters at 2900 N. Lincoln Blvd. The building was erected on a site that was cleared during the “Renaissance Project” proposed by Gov. Frank Keating, during which several shabby motels along Lincoln Boulevard were bulldozed.
“We figured we could lower our monthly rent by half” if the department had its own building, Thompson said. Plus, “At the time, we thought it was big enough to accommodate any anticipated growth.” However, institutions and operations the Banking Department monitors experienced unprecedented growth. The department regulates 154 banks (which have scores of branch offices), 13 credit unions, eight trust companies, 11 money-order companies (such as American Express), 128 non-depository money transmitters (such as PayPal Inc. and Western Union) that collectively have more than 5,000 agents, and one savings and loan association.
But “assets are the key,” Thompson said. Assets of institutions and operations subject to Banking Department regulation have grown from “just under $40 billion” 10 years ago to “almost north of $70 billion in assets” today, the commissioner said. For example, in 2016 John Massey’s First United Bank in Durant acquired a national bank in Texas that has 32 branches in the Lone Star State and more than $2.3 billion in assets. This brought those banking assets under Oklahoma control. First United now has more than 70 community banks and 15 mortgage offices throughout Oklahoma and Texas, with combined assets of more than $5.5 billion, the company reports on its website.
Texas rancher, oilman, philanthropist and banker Ross McKnight, an Oklahoma State University graduate, brought 10 Oklahoma and Texas banks under one Oklahoma state charter in 2010 under the name InterBank. RCB Bank in Claremore, which was founded in 1936 under the name Rogers County Bank, today has 43 branches across Oklahoma and 20 branches in Kansas. Similarly, American Heritage Bank in Sapulpa has 21 branch offices throughout Oklahoma.
GROWTH
Previously each of the Banking Department’s examiners was responsible for overseeing $1.3 billion in assets. But now, because of substantial growth in the financial industry, each of the department’s examiners is responsible for monitoring more than $2 billion in assets, Thompson said.
The Banking Department has 45 employees, including 34 examiners, the commissioner said. Even though some of those examiners work out of a field office in Tulsa, the Oklahoma City headquarters building is cramped. “Our lone attorney is in a cubicle with examiners,” Thompson said, “and we have one employee whose desk is in a hallway.”
A one-story, 4,000 square-foot annex is slated to be constructed on a piece of state-owned property that adjoins the Banking Department’s parking lot. The annex will house offices for 20 to 24 of the department’s examiners, and their space in the headquarters building will be remodeled after the move, Thompson said.
NO TAX DOLLARS
The Banking Department receives no tax dollars from the Oklahoma Legislature; the department is financed solely from fees collected from the institutions it regulates. In fact, the department transfers 10% of its revenues into the state’s General Fund for appropriation by the Legislature, Thompson said.
“We hold enough money in reserve that if a big bank were to fail,” like Penn Square Bank did in 1982, “we could withstand the financial ‘hit’ until the growth came back,” he said, however, the department doesn’t amass a slush fund. “In the last five to six years” the state Banking Department “has rebated more than $14 million to Oklahoma-chartered banks and credit unions” via reductions in their assessments, Thompson said. The reductions included 10% for the current year, 20% last year and 50% the year before, he said. “That’s money the banks were able to invest in their communities.”