WASHINGTON - A dozen more banks are protesting the government's plan to capitalize the Savings Association Insurance Fund through a one-time fee on thrift deposits.
In a letter last week to Federal Deposit Insurance Corp. Chairman Ricki Helfer, 12 banks argued that they should not be penalized for having bought thrift deposits.
"At no time were we informed, nor did we contemplate, that, by purchasing thrift deposits, commercial banks would be subject to a special assessment," wrote the banks, which are being represented by Diane Casey, director of financial institutions regulatory issues for Grant Thornton here.
The government's proposal, delivered to Congress in July, would build the thrift fund by raising more than $6 billion through an 85-basis-point fee on all thrift deposits held by financial institutions as of March 31.
More than 700 banks that have bought thrift deposits would owe about $1.6 billion, according to Randy Dennis, president of DD&F Consulting Group in Little Rock, Ark.
Mr. Dennis said including bank holding companies that own thrifts would add $536 million, bringing the banking industry's share of the $6 billion total to $2.1 billion.
Last week's letter was preceded by a letter from 11 other banks Aug. 7 complaining to Ms. Helfer that they are being asked to pay a fee on deposits that no longer exist.
These bank companies, including Banc One Corp. and Barnett Banks Inc., argued that it is unfair to levy an assessment on thrift deposits when up to 40% have run off.
The FDIC is studying the letters, but Congress is expected to consider the issue after Labor Day as part of the administration's rescue plan for the thrift fund.
The letter last week urged the FDIC to discount the fee for banks that bought thrift deposits recently.
"Failing to reflect the length of ownership of the deposits distorts the economics of these Oakar transactions," the letter said. "An adjustment should be made to account for the economic impact on commercial banks that have not owned their SAIF-insured deposits long enough to recover their investments."
The banks, including Compass Bancshares Inc., Birmingham, Ala., proposed 10% reductions for each year deposits were owned after 1990. A bank that bought thrift deposits in 1990 would pay the full 85-cent assessment per $100 of all its thrift deposits. But a bank that bought thrift deposits in 1994 would only have to pay on 60% of its deposits.
For example, Prime Bank in Channelview, Tex., which bought $400 million of thrift deposits in October 1994, would pay roughly $2.1 million under the proposal instead of $3.4 million.