Thrift Assets Expected to Fall This Quarter
WASHINGTON - Thrift industry assets may decline in the fourth quarter for the first time since 1997 as Bank of America Corp. shifts $27.6 billion of assets from its thrift to a banking subsidiary.Two more thrift charters will be turned in during the first quarter, shifting another $40 billion out of the industry, Office of Thrift Supervision Director Ellen Seidman said last week.
During a press conference to announce the industry's third-quarter earnings, Ms. Seidman said the Charlotte, N.C., banking company recently closed Bank of America FSB in Portland, Ore. Ms. Seidman said the agency expects Dime Bancorp. to shift $22 billion of assets to a bank charter in the first quarter, while ABN Amro North America Inc. takes $18 billion of assets out of the industry.
So a roughly $68 billion decline in total assets is expected. The industry's total assets hit $863 billion on Sept. 30, up 5.5% for the year. Industry assets climbed 5.2% in 1998 and 1% in 1997 after falling each year since 1992. The total number of thrifts has been declining since 1992, falling 41%,to 1,111, on Sept. 30.
OTS officials played down the defections, saying the industry's asset growth is expected to remain strong.
"Because of the growth that has been going on, the impact of these institutions leaving is not going to be very much," OTS spokesman William Fulwider said Friday. There will be no impact on the agency's budget or the industry's assessments, he said. The OTS covers its costs by charging thrifts fees based on their asset size.
Treasury Polls Credit Unions on Loan Levels
WASHINGTON - The Treasury Department has sent a detailed questionnaire about business lending to 2,500 credit unions for a study required by the 1998 Credit Union Membership Access Act.The law capped a credit union's business lending at 1.75 times its net worth, not to exceed 12.25% of assets. However, business loans under $50,000 do not count toward the cap and low-income credit unions, credit unions with a history of making significant business loans, and those specifically chartered to make small-business loans are exempt.
The Treasury is already four months late in delivering the study to Congress, which wanted to know if tax-exempt credit unions entering this market could affect the profitability of banks.
In a letter sent last week, the Treasury said it could not complete the study because data, such as a breakdown of the types and sizes of businesses that get loans from credit unions, does not exist. The Treasury sent the survey to 1,500 credit unions known to extend business credit, plus 1,000 institutions selected at random. Survey responses are due at yearend.
