WASHINGTON — As the Federal Reserve Board and Office of the Comptroller of the Currency take over supervision of thrifts and their holding companies, savings and loans have grown increasingly scared about a possible crackdown on their business.

Though by law thrifts still comply with most of the same capital and other standards they have faced for decades, they and their representatives said they expect the new regulators to force them to comply with bank-like requirements.

For many thrifts, that would mean holding more capital at the holding company level, complying with tougher lending limits and facing more skeptical examiners.

"One of the concerns we would have as a thrift under the OCC is, are they used to regulating a thrift that has a concentration in assets, [as] we do with single-family mortgages?" said John Dicus, the president and chief executive officer of $8.5 billion-asset Capitol Federal Financial in Topeka, Kan. "There are not as many banks that have concentrations in an asset class, so that's a concern."

Their fears are primarily due to a perception that the Office of Thrift Supervision, which is to be disbanded under the recently enacted regulatory reform law but which has another year before it officially closes its doors, was insufficiently tough on its institutions.

Though the agency adamantly denies the charge, many industry representatives said the Fed and the OCC will take a long, hard look at their new charges to ensure they are properly supervised.

"At the thrift level, where the OCC is replacing the OTS, the concern is, will the OCC kick the tires harder to prove the OTS wasn't a good regulator?" said Lawrence Kaplan, a lawyer at Paul, Hastings, Janofsky & Walker LLP. "That's a concern for a lot of people."

The law splits thrift supervision, which was consolidated at the OTS, into two parts. As it does for bank holding companies, the Fed will oversee thrift holding companies while the OCC supervises individual thrifts.

OTS officials said current concerns are just anxiety over the change of regulators.

"It's change, and change is always looked upon differently by a lot of people," said Tom Barnes, an assistant deputy director at the OTS. Thrifts have had an accepted "set of rules and who the regulator is and what kind of company, and now that's going to change. … Things will be ironed out. They will have to ask the questions, and we have to be sensitive to their questions."

Many observers said the biggest changes will occur at the holding company level. Under current practice, the OTS does not require specific capital ratios for thrift holding companies but uses bank holding company standards as a baseline and varies that as needed, depending on the type of company. Though the OTS has said such an approach makes sense given the differences between thrift and bank holding companies, the Fed is not expected to agree.

Instead, the central bank has used consolidated capital standards that ensure a bank holding company maintains adequate capital to support its companywide activities and does not become excessively leveraged.

Observers said they expect that, as a result, thrift holding companies will have to hold more capital. "That's obviously a pretty big concern for them," said Dwight Smith, a partner at Alston & Bird LLP. "At the moment, savings and loan companies aren't subject to the capital requirements banks are."

The Fed and OTS have also emphasized different capital structures, with the Fed more heavily focused on Tier 1 capital.

"OTS has not spent as much time with that and has not been nearly as specific on how you calculate Tier 1 capital, so that may be a change in calculating," said Smith. "I think they may have to focus a little bit more on what their common stock of Tier 1 capital is."

Due to enactment of the Dodd-Frank regulatory reform law, thrift holding companies are also now subject to "source of strength" capital standards for their depository subsidiaries, another change that is likely to force firms to raise capital. "It could mean higher capital," said Smith. "I think, more practically, what it's going to lead to is more intensive exams at the holding company level."

Many industry representatives said they expected both the OCC and Fed to be tougher on the thrift industry. "Historically the Fed has been a tougher regulator and the same for the OCC," said Bob Clarke, a senior partner at Bracewell & Giuliani LLP and a former comptroller of the currency. "They will take a different view on asset quality, and there will be some downgrades — or at least that's what thrifts are afraid of."

William Longbrake, the executive in residence at the University of Maryland's Smith School of Business and a former vice chairman at Washington Mutual Inc., agreed that thrifts are worried about OCC regulation leading to downgrades. "Thrifts generally fear the OCC will not understand their business and have a harder-nosed attitude about loan classification," Longbrake said.

Kip Weissman, a partner at Luse Gorman, agreed downgrades are possible. "There's some banks which have borderline grades, and the borderline mark up on the grade is based on the quality of management, credibility etc.," he said. "If you have a new regulator, that won't apply because the regulator doesn't know that management. … Every thrift is concerned about their first exam."

Of the two agencies, the Fed may arouse more wariness. Some companies, particularly nonbanks, that opted for the thrift charter did so explicitly to avoid holding company regulation by the central bank. "The Fed basically will give everybody a full-body exam, a cavity search, whereas the OTS would not focus on the nonbanking entities," said Kaplan.

Gil Schwartz, a partner in Schwartz & Ballen LLP, said the OTS traditionally supervised thrift holding companies for whether it would adversely affect the thrift or the Deposit Insurance Fund, but he said the Fed is likely to dive into other financial subsidiaries. The OTS has been criticized for not delving into more parts of American International Group overall as a regulator of its thrift.

"The level [of] the OTS review … is far less intrusive than the Fed," Schwartz said. "An example of that is AIG ,where the OTS has admitted it didn't look with a great degree at the [nonthrift] portions. … The Fed is going to say, if you have a huge amount of activities going on outside of the thrift, we want to know about it because it's not only a question of the impact on the thrift but the impact on the financial system. AIG is the poster child for Dodd-Frank for engaging in the kinds of activities that are nonbanking or thrift activities."

In testimony in March 2009, then-OTS acting director Scott Polakoff acknowledged that the agency had focused "too narrowly" in its supervision of AIG and failed to see the magnitude of the company's credit default swaps.

Tom Vartanian, a partner at Dechert LLP, said the Fed also differs in its treatment of change of control applications, as well as acquisitions and private-equity investment.

Dicus of Capitol Federal Financial said his thrift converted from a mutual to a stock company in part because of the different Fed rules it would soon face. "The Fed was the concern … because of their rules how we, as a mutual holding company, waive dividends," he said. It "is different than the OTS."

But Dicus denied that thrifts received light treatment from the OTS. "It's more the concern of the unknown," he said. "Contrary to the popular belief, we don't believe the OTS was the easy regulator. … I'm not concerned that it's going to be any tougher than the environment we've been in."

But many thrifts are also worried about the OCC — a fear Clarke said was somewhat justified. "When you are moving from one regulator to another — and one viewed [as] more user-friendly to one viewed [as] tougher — there is a fear that the OCC will be tougher on the thrifts than the OTS, and that's a legitimate concern," he said.

Bert Otto, the OCC's deputy comptroller for the Midwest district, said thrifts will still follow thrift regulations but the OCC will apply its own policy in carrying out its supervision.

"I think, once we get into the new OCC, it's going to be one supervisory philosophy," he said. "I believe and I think there will be uniqueness with the thrift industry, but we will continue on with the way we do our supervision."

While the OTS has been characterized as more centralized or Washington-centric, Otto said the OCC applies a more local approach. "We do empower our examiners to make decisions at the local level, and we expect regular communication between examiners and the institutions we supervise," Otto said. "I think both examiners and thrifts will thrive in this environment."

One big unknown is how the Fed and OCC will treat mutuals, which are unique among banking charters. "The bigger question mark is mutual thrifts because in the OCC's history they've never regulated a thrift," said Frank Bonaventure, a principal at Ober, Kaler, Grimes & Shriver.

Weissman also said the OCC differs in its treatment of liquidity. "The OCC has historically been more focused on liquidity," he said. "A classic commercial bank has more liquidity than a thrift. A savings institution invests more in commercial loans, and they don't yield as much."

As the transition period winds down, industry representatives said they expect some thrifts to convert to a state charter, which are regulated by the Fed and Federal Deposit Insurance Corp.

"A few have told me they don't want to stay with the OCC and they would rather switch to a state charter," said Chris Cole, regulatory counsel for the Independent Community Bankers of America. "They don't want to be regulated by both the OCC and Fed together. If they are going to be regulated by the Fed at the holding company level, then let's just switch to a state charter and work with the Fed."