WASHINGTON - The House Banking Committee's financial institutions subcommittee agreed to give banks that own thrift deposits a big break in legislation designed to bail out the Savings Association Insurance Fund.
The panel voted to permit these so-called Oakar banks to transfer their thrift deposits to the Bank Insurance Fund simply by paying a 66-basis- point fee.
The legislation originally would have levied an 85-basis-point fee on all thrift deposits, including the $140 billion in thrift deposits controlled by banks. The 85-basis-point fee on deposits is supposed to raise $6.1 billion to capitalize the thrift fund.
After giving the Oakars a break, the subcommittee agreed to make up the shortfall by increasing the fee thrifts will pay to 85.7 basis points. The change is expected to add $150 million to the thrift industry's bill.
"It's absolutely obscene when an industry puts up a year's earnings that anybody would add a fraction of an additional cost," said Paul Schosberg, president of the America's Community Bankers.
The Oakar amendment was sponsored by Reps. Bill McCollum, R-Fla., and Bruce Vento, D-Minn. The amendment would have lowered the Oakars' cost even more before Rep. Ed Royce, R-Calif., amended it to 66 basis points.