Trade groups are expected to lock horns Tuesday at the first public hearing on deposit insurance reform.

The Federal Deposit Insurance Corp. is scheduled to hear from eight speakers representing banks, retired people, and consumers, among others. Topics include how much to charge, whether to rebate excess premiums, and how much protection to offer depositors. By yearend, the FDIC has pledged, it will recommend changes to Congress.

The American Bankers Association urged the industry to stand united. "Unless the industry comes together with one voice, Congress won't act," the ABA's chief lobbyist, Edward L. Yingling, said last week.

In exchange for agreeing to merge the bank and thrift insurance funds, the ABA wants to double the $100,000 coverage level and then index it to inflation, cap the size of the combined fund, and rebate excess premiums to banks and thrifts.

The Independent Community Bankers of America supports the first two changes but instead of a rebate wants the FDIC to guarantee all municipal deposits. Rebates would benefit only the largest banks, which do not need deposit insurance because they are considered "too big to fail," said the ICBA's executive vice president, Kenneth A. Guenther.

Mr. Yingling predicted that idea will never fly in Congress. "One hundred percent insurance coverage is controversial on Capitol Hill," he said.

Mr. Guenther begs to differ. "We've been working the Hill for legislation on this issue, and we've gotten some favorable vibes," he said. "We're hoping to get legislation passed sometime next year."

The debate over whether and how to merge the deposit insurance funds has been simmering for years, but it was the subject of a House Banking financial institutions subcommittee hearing in February, and in March FDIC Chairman Donna Tanoue launched a wholesale review of the system.

Together, the bank and thrift insurance funds hold nearly $40 billion of reserves.


The demonstrators who descended on Washington last week to protest the policies of the World Bank and the International Monetary Fund did not stop the international delegates from meeting, but they managed to keep federal bank and thrift regulators out of their offices.The 90-square-block security zone cordoned off by police during last Monday's protests is home to the Office of Thrift Supervision, the Federal Deposit Insurance Corp., and the Federal Reserve Board.

Few employees made it to work at the OTS, which is on the same block as some of the World Bank offices. According to spokesman William E. Fulwider, most personnel stayed home, and a few who tried to get to the offices were turned back by the crowds.

One block away, the FDIC was also closed. A spokesman said that if any banks had suddenly failed during the World Bank/IMF protests, the agency's L. William Seidman Center in Arlington, Va., or one of the eight regional offices would have handled it.

But at the Fed, Chairman Alan Greenspan and the members of the board of governors were undeterred by threats of tear gas and mob violence. They showed up for their regular Monday meeting.

The Fed, several blocks from the center of the protests, was technically closed. "But there were plenty of people around," spokesman David Skidmore said. "Employees were not charged with a leave day for staying home, but those who knew they had to be here came in."

The Office of the Comptroller of the Currency is in southwest D.C., far from the protests.


The American Bankers Association has hired Robert J. Fouberg as senior counsel for agricultural and rural banking. He succeeds Bryce Quick, who ABA officials said resigned in February after about three months on the job because of a family emergency. Mr. Fouberg was previously manager of agricultural and conservation policy for Ducks Unlimited.Among his priorities are lobbying House and Senate negotiators on crop insurance reform, urging increased funding for the Department of Agriculture's Farm Service Agency to guarantee loans to farmers, and opposing proposals by regulators to let Farm Credit System banks lend nationally instead of regionally.

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