Senate Votes 10% Cut in Oakars' Tab for Thrift Fund Bailout

WASHINGTON - thrift deposits as part of a plan to bail out the Savings Association Insurance Fund. At the urging of Senate Banking Committee Chairman Alfonse M. D'Amato, the Senate voted late last Friday to allow the so-called Oakar banks to receive a 10% reduction on their share of a one-time assessment on thrift deposits. In September, the Banking Committee voted to give Oakar banks a 5% reduction as part of the panel's budget reconciliation plan. But at the urging of Sen. Lauch Faircloth, R-N.C., Sen. D'Amato last Friday asked the Senate to accept an amendment doubling the Oakar break. The provision was approved on a voice vote. NationsBank and First Union National Bank - two banks with large thrift deposits - are based in Sen. Faircloth's home state. Budget plans passed by both the Senate and the House would levy a special assessment of roughly 85 cents on each $100 of deposits. Both bills also would require banks to assume $12 billion in payments for long-term bonds floated to fund the thrift industry's 1987 bailout. There are 713 Oakar banks that have acquired $203 billion in thrift deposits. Executives at many of those banks have been arguing that they should get a reprieve because a large portion of those acquired deposits have run off. If the Senate's 10% break is enacted, Oakar banks would trim $170 million from their $1.72 billion portion of the thrift deposit assessment. The thrift industry would be stuck making up the difference. The House budget bill contains no guaranteed break for Oakar institutions. However, House Banking Chairman Jim Leach has said he will try to insert provisions from separate legislation that would cut roughly $380 million from the Oakars' tab. The House bill takes a different approach, however. The legislation would allow Oakar banks to transfer their thrift deposits to the Bank Insurance Fund and pay a 66-basis-point entry fee.