$3B Thrift Tax Break

In Bill Passed by Senate

WASHINGTON - The Senate approved legislation late Thursday protecting thrifts from $3 billion in back taxes.

The bill forgives taxes owed on bad-debt reserves built up before 1988. But savings and loans must still pay $1.5 billion over seven years for tax breaks received on reserves taken after Jan. 1, 1988. Thrifts will be able to defer the taxes for up to two years if they maintain current levels of residential lending.

The tax plan was attached to a health insurance bill to help offset the costs of mental health care programs. The House approved the plan in March as part of its health insurance bill.

- Bill McConnell OCC Reports Success In 'Mystery Shopping'

WASHINGTON - Mystery shopping can measure fair-lending compliance at national banks, according to a study released Friday by the Office of the Comptroller of the Currency.

The OCC sent white and minority borrowers with similar financial histories to eight banks to apply for loans. It said the banks treated the applicants the same.

Banking industry officials praised the report. "It is good news," said Joe Belew, president of the Consumer Bankers Association. "If nothing else, it shows banks are getting the message. We are making progress."

Civil rights activists said matched-pairs testing gives the agency a new weapon. "This is an important compliance tool," said Richard Ritter, a consultant to the Washington Lawyers Committee for Civil Rights and Urban Affairs. "It is not terribly costly, and it is useful when there are complaints from customers who didn't think they were treated fairly when they first applied for a loan." Jaret Seiberg Law Favors Debtors, Review Panel Is Told

WASHINGTON - Lenders complained Friday that the Bankruptcy Code makes it too easy for borrowers to shed their debts.

Addressing the National Bankruptcy Review Commission, Visa U.S.A. senior vice president David Nordemann said as many as 20% of Chapter 7 bankruptcy filers had the ability to pay back more of their debt.

Jan Elston, a lawyer for Ford Motor Credit Co., urged the commission to eliminate the scores of unnecessary hearings creditors must attend in order to get repaid.

Credit card companies write off $5 billion a year in uncollectible debt, Mr. Nordemann said.

The commission is supposed to recommend modernizations of bankruptcy law to Congress. Jaret Seiberg

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