The banking industry's fragile peace is about to be broken.
For the past two years, the industry has been held together by the common enemy of regulatory burden. The pursuit of regulatory relief was a great issue for trade groups, the kind of cause that rallied all banks, big and small, around the same flag. Even the industry's rival major organizations - the American Bankers Association and the Independent Bankers Association of America - were largely together on regulatory burden.
Today, though, the two groups appear ready to go to war over the question of how to deal with the thrift industry's undercapitalized insurance fund.
Kenneth A. Guenther, executive vice president of the IBAA, fired the opening shot at the trade group's annual convention in Honolulu this week. The ABA, he said, has buried its head in the sand, refusing to acknowledge that the banking industry could be engulfed by the financial problems facing the thrift fund.
Edward L. Yingling, chief lobbyist for the ABA, responds that there is no problem now - except for the one he says Mr. Guenther is creating for the industry.
The problem is that the fledgling Savings Association Insurance Fund is so thinly capitalized that a major failure could wipe out its reserves. As a result, the insurance premiums paid by savings institutions are likely to remain stuck at stratospheric levels for years to come.
By contrast, the Bank Insurance Fund is in such robust good health that the banking industry's premiums are due to drop later this year to an average of 4 cents for each $100 of insured deposits - about a sixth of the current level.
Thrifts are alarmed at the rate disparity that will open up as a result, and a number of policymakers - in the administration and on Capitol Hill - share that concern.
Many bankers fear Congress will ask them to help recapitalize the thrift insurance fund, perhaps by sharing responsibility for the Financing Corp., or Fico, bonds that were authorized in 1987 as part of a failed effort to salvage the S&L insurer.
Mr. Guenther sees a solution in the Resolution Trust Corp., the agency created to manage the thrift bailout. The RTC is expected to have as much as $11 billion left over when it completes its work, and Mr. Guenther said that money is enough to put the thrift fund on sound footing.
He said the industry - the ABA included - should fight for using the RTC money with everything it's got. The ABA disagrees.
"We don't understand how banker interests are served by the position of the ABA that there is no SAIF-Fico bond problem," Mr. Guenther said in a pep talk to the trade group's convention.
Mr. Yingling said the IBAA is asking the industry to take a risk. Congress won't make the RTC money available to the thrift fund under any circumstances, he said, and the IBAA's lobbying will only alarm and antagonize lawmakers - perhaps jeopardizing the promised premium reduction.
"Our message is that there is no emergency - and no legislation is needed in 1995," he said.
Mr. Guenther acknowledges that the RTC option is a longshot. It would almost certainly require legislation, and House Banking Committee Chairman Jim Leach can be counted on to fight the IBAA proposal like death itself.
But the IBAA executive is undeterred. "Before the banking industry rolls over and plays dead" - an allusion to the ABA - "we need to fight for those RTC dollars," he said in an interview.
Make no mistake about it - the fight over the thrift fund has the potential to be a bloody brawl between the banking industry's two top trade groups. We're not talking about regulatory relief anymore.