Federal Deposit Insurance Corp. Chairman Ricki Helfer said Wednesday she is more hopeful than she has been in months about the prospects for a legislative rescue of the thrift insurance fund this year.
"I'm more optimistic because more folks are at the table," she said, noting that bankers, legislators, and the Clinton administration all were involved in a compromise approved last week by the House Banking Committee.
But Ms. Helfer said she is concerned that an amendment sponsored by Rep. William Orton, D-Utah, could scuttle the deal. The amendment, which "came out of the blue," with industry support, would help pay for the resolution by tapping into Federal Reserve surplus funds.
"I've never personally opposed access to taxpayer money" for the Savings Association Insurance Fund, she said. But the amendment faces opposition from the Fed and several key legislators, and such controversy can jeopardize bills late in a congressional session.
Ms. Helfer, who was speaking in an interview, played a key role in gaining support for the compromise. It calls for banks to pay about $320 million a year in Financing Corp. interest for the next three years.
Ms. Helfer focused her efforts for banker involvement in the compromise not "inside the Beltway" but on "senior people - the bankers who are the directors" of major trade groups.
She said bankers had used "a lot of time and political chips" on avoiding a role in the SAIF rescue that could have been better spent on getting other things they want.
Bankers increasingly recognize, she said, that even if they ended up paying $600 million in annual interest on the Financing Corp. bonds, their payouts would still be less than the equivalent premium rates they paid prior to 1996.
Ms. Helfer acknowledged that banking groups want sweeteners such as regulatory relief or enhanced powers.
Regulatory relief is possible, she said. But the Independent Bankers Association of America and American Bankers Association achieved something simply by delaying the sharing of the Fico burden, she said. And in the legislative compromise last week, banks got reduced Fico assessments for three years.
If Congress fails to work out a solution this year, Ms. Helfer worries that more thrifts, paying premiums 23 basis points higher than banks, will find ways to shift deposits from the thrift fund to the Bank Insurance Fund.
On Tuesday, TCF Financial Corp., the first thrift to obtain a full national bank charter, received deposit insurance approval for the four banks it wants to start.
The FDIC approved deposit insurance applications July 1 from two midwestern thrifts, signaling that the agency would not ban the voluntary shifting of deposits from the thrift fund to the bank fund.
Ms. Helfer said the FDIC approvals were not designed to pressure bankers into making a deal. "We looked at the law and the staff gave the board what it considered to be the best, most supportable reading of the statute," she said.
Staffs of the FDIC, Federal Reserve, Office of the Comptroller of the Currency, and Office of Thrift Supervision are working together to monitor the thrifts that operate banks, she said. "There seems to be a meeting of the minds" on how to regulate such operations. The FDIC is considering whether to impose more rules to ensure that consumers are not confused, she said.
The FDIC chairman dismissed recent speculation that her agency could soon get a windfall - by suing the government for insured institutions' losses from the treatment of supervisory goodwill - that could be used to shore up the thrift fund.
Any settlement amount is "highly speculative," Ms. Helfer said, adding, "We're talking about years of litigation, and we have an immediate (SAIF) problem."
