WASHINGTON -- Despite increasingly insistent cries about overregulation, bankers in the upper Midwest favor many of the provisions of the 1991 banking law -- at least in principle.

In a survey of 95 bankers by the Federal Reserve Bank of Minneapolis, more than four out of five said they supported risk-based deposit insurance premiums, early closing of troubled banks, and tying the level of bank regulation to capital.

There was slightly less enthusiasm, but still majority support, for scaling bank the "too big to fail" doctrine.

Savings Law Unpopular

By contrast, only 27% favored truth-in-savings provisions, which require significant additional disclosures to savings depositors.

All these policies were mandated in the Federal Deposit Insurance Corp. Improvement Act of 1991.

The bankers are so sick of regulation that 81% in the Ninth Federal Reserve District survey said they would support cutbacks in deposit insurance so that depositors have an incentive to monitor banks' health.

This shows a preference for market discipline over regulation, said David S. Dahl, a Minneapolis Fed economist, who worked on the study published this month in the bank's fedgazette.

The poll was taken in August and included bankers in six states.

Unexpected Results

The study generally seems to contradict claims by lobbyists that bankers unanimously pan the 1991 law.

But critics say the regional survey covered only the less controversial parts of the law.

"Almost everybody in the industry, and certainly the ABA, supported certain parts of it," said Edward L. Yingling, the American Bankers Association's top lobbyist. The survey did not ask "about a lot of little individual micromanaging provisions" in the FDIC Improvement Act of 1991, "and that is where the objections are."

Kenneth A. Gunther, executive vice president of the Independent Bankers Association of America said, "I don't think you can read it as bankers saying we like FDICIA. I do think bankers do support generally some of the concepts."

Compliance Costs

The upper Midwest study found that 36% of bankers attributed more than 10% of their noninterest expenses to regulation compliance, while 52% estimated the costs at 3% to 10%.

Ninth-district bankers were split on whether to support interstate branching, and they overwhelmingly favored loosening restrictions on the kinds of financial services banks can provide.

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