Congress has removed a major obstacle to merging the bank and thrift charters by relieving the thrift industry of a $3 billion tax liability.

The legislation equalizes the taxation of banks and thrifts, but shields the latter from taxes on so-called "bad-debt reserves" taken to cover potential loan losses prior to 1988.

The provision, passed Friday by both the House and Senate, was a prerequisite for thrifts' support of the $5 billion Savings Association Insurance Fund rescue plan currently under consideration.

Reserves thrifts set aside through 1987 are not taxed, but the industry will have to ante up $1.5 billion for reserves made since Jan. 1, 1988.

"If you force the bad-debt recapture and the one-time assessment, you're making an enormous financial liability for the industry," said Frank Wright, director of external relations for Dime Bancorp in New York.

The $19.5 billion-asset Dime faced a liability of roughly $65 million for pre-1988 reserves. Mr. Wright said the tax liability for the subsequent period "is a fair trade-off."

The thrifts won their long-awaited victory when Congress attached the bad-debt taxation measure to a bill increasing the minimum wage. Revenue from the bad-debt bill will offset money lost in tax breaks granted to small businesses.

The legislation removes a huge liability if thrifts are forced to accept bank charters as part of the insurance fund rescue.

The House could vote next month on its bailout bill, which would require a common charter by 1998. The fight over how the charters should be merged will begin in earnest next year, but the thrift industry would not have come to the table if Congress had not wrapped up the bad-debt issue.

"You can't do charter realignment without this legislation," said Brian Smith, director of economics and research at America's Community Bankers, the thrift trade group. "The bad-debt liability created an insuperable tax barrier."

The new law will eliminate the bad-debt-reserve deduction created in 1953, which allowed thrifts to set aside 40% of their income tax-free for unrealized loan losses. In 1987, Congress cut the limit to 8%.

Taxes on post-1987 reserves must be paid over six years beginning in 1997. But institutions can delay those taxes for two years if they meet a residential-lending test.

Friday's vote resolves uncertainty over a proposal that had wide congressional support, but was repeatedly paired with controversial measures that prevented its passage.

Last fall the bad-debt plan was initially included in the balanced- budget bill vetoed by President Clinton. Later, Republican leaders included it as part of a health care bill, using its $1.5 billion in tax revenue to offset the money lost to tax-deferred medical savings accounts. In April, the plan was inserted in a separate bill to cover the costs of a new adoption tax credit.

"The bad-debt legislation was never controversial, but it got tied up because it paid for things that were," said Richard F. Hohlt, an industry lobbyist.

Besides the bad-debt plan, the minimum wage/tax bill contained several other provisions for banks, including tax-free rollover of common trust assets into mutual funds and creation of "financial asset securitization investment trusts" for securitizing nonmortgage debt.

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