Viewed as Refocusing Effort to Fix Thrift Fund

Lawmakers are rethinking the thrift insurance fund bailout plan, and bank lobbyists say much of the thanks goes to Rep. Doug Bereuter.

The Nebraska Republican has supplanted the stalled administration-backed plan with one that would cut and postpone banks' share of the tab.

More importantly, the Bereuter bill rewards banks with regulatory relief for their help in shoring up the Savings Association Insurance Fund.

Lobbyists say Rep. Bereuter's plan has little chance of being enacted as is, but it provides a good starting point for new negotiations.

"People are finally focusing on the fact that if anything is going to pass, it's not going to be the old plan," said Edward L. Yingling, chief lobbyist for the American Bankers Association. The ABA has not taken a position on Rep. Bereuter's bill, however.

House Banking Committee Chairman Jim Leach has shown no interest in moving Rep. Bereuter's bill. Aides said Rep. Leach Thursday will unveil a list of options for tackling the thrift fund.

Rep. Leach is reportedly furious with Rep. Bereuter for introducing his plan on June 6, the same day the Iowa Republican was beginning a committee vote on his comprehensive Glass-Steagall/regulatory relief bill. Rep. Leach was forced to withdraw his bill five days later when it became obvious the legislation would be rejected.

At least one banking group is trying to build support for Rep. Bereuter's plan. The Independent Bankers Association of Texas, which represents more than 700 banks in the Lone Star State, wrote a June 18 letter to House Majority Leader Dick Armey, backing Rep. Bereuter's plan.

"It's in the best long-term interest for the industry to resolve the BIF-SAIF issue," said IBAT president Christopher Williston. "It's like a loaded gun at our head all the time."

To placate the banking industry, which fiercely opposes the thrift fund capitalization plan already before Congress, Rep. Bereuter's bill includes several provisions that reduce banks' obligation to help pay for Financing Corp. bonds. Fico bonds were used to finance the thrift industry bailout of the late 1980s.

They include delaying until Jan. 1, 1998, the date banks must assume the bulk of interest payments on Fico bonds; tapping the Federal Reserve's surplus fund to cover $100 million of the Fico tab; allowing premiums from banks that own thrift-insured deposits to pay off the bonds.

Other provisions include:

*Delaying until 1998 the one-time assessment on all thrift deposits;

*Merging the two insurance funds on Jan. 1, 1998, if bank and thrift charters have been merged;

*Using the bank insurance fund as a backup if thrift losses exhaust the savings association fund;

*Rebating bank insurance premiums retroactive to Dec. 31, 1995;

*Cutting the thrift fund's premiums to approximately 11 cents.

In addition to much of the streamlining proposed in other regulatory relief packages, Rep. Bereuter's bill would exempt rural institutions with assets of $100 million or less from the Community Reinvestment Act.

Administration officials said they are unlikely to support Rep. Bereuter's bill. "We continue to be committed to the existing proposal passed," said Treasury Under Secretary John D. Hawke Jr. "We've not given up hope by any means."

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