OTS chief urges prospering thrifts to educate Congress.

Jonathan L. Fiechter has served as the thrift industry's top regulator since December 1992.

As acting director of the Office of Thrift Supervision, he oversees the country's 1,627 savings and loan associations and federally chartered savings banks.

He is also a board member of the Federal Deposit Insurance Corp., which regulates state-chartered savings banks. The FDIC will be a key player in determining whether deposit insurance premiums for the Bank Insurance Fund drop next year, as expected, while those for the Savings Association Insurance Fund remain higher.

American Banker's Robyn Meredith interviewed Mr: Fiechter in Washington on the eve of the annual convention of

the Savings and Community Bankers of America.

Q.: As the thrifts meet in Orlando, should they feel good about themselves?

FIECHTER: Yes. The industry's recovery from the 1980s demonstrates its resiliency and its ability to meet the needs of its customers.

The industry's capital level is at its highest in years.

This has created a solid foundation on which the industry can structure itself to prosper in a highly competitive financial market.

Q.: Bank regulators recently said they were concerned about institutions loosening their credit standards. Have you found that in the thrift industry?

FIECHTER: With the drop in refinancing volume, we have seen competition in the loan origination market intensify. Earlier this summer, we reminded institutions of the need to maintain credit standards and to resist lowering their standards in an effort to maintain market share.

Q.: What would be the best way to solve the expected dilemma of the gulf between what thrifts and banks pay in deposit insurance?

FIECHTER: Close to half of the deposit insurance premium paid by thrifts each year is diverted to service FinanCing Corp. debt. The FICO obligation, which has 25 years remaining, is the primary cause of the problem faced by SAIF-insured thrifts.

Q.: Can you tell me about any new regulatory initiatives that will come from the OTS in the next year?

FIECHTER: In the absence of new legislation, we do not expect any new major regulatory initiatives.

Q.: Looking ahead to the next year, do you have any advice for SCBA members?

FIECHTER: Many.of the challenges facing the thrift industry will require legislative remedies.

The thrift industry continues to fill an important niche in our financial markets, particularly in its financing of multifamily and nonconforming loans.

The members of the industry have to become more proactive in educating the Congress on the issues facing the industry.

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