Congress must act quickly to shore up the Savings Association Insurance Fund or it may be unable to meet its obligations to depositors, banking regulators told lawmakers Tuesday.

In a letter sent to House Speaker Newt Gingrich, Senate Majority Leader Bob Dole, and other congressional leaders, Federal Deposit Insurance Corp. Chairman Ricki Helfer, Treasury Under Secretary John D. Hawke Jr., and Office of Thrift Supervision Acting Director Jonathan L. Fiechter urged that the thrift fund fix be "enacted promptly."

If the rescue plan does not become law, the thrift fund will continue to be undercapitalized and member institutions will continue to face higher deposit insurance premiums than banks.

"If not corrected, these problems could erode the deposit base on which SAIF collects premiums, cause a default on bonds issued to pay for past deposit insurance losses, and leave SAIF unable to meet its obligations to insured depositors," the three regulators wrote.

"The failure of one large savings institution or several midsize institutions - although not currently projected - could exhaust SAIF's reserves," they said.

The regulators laid out their concerns in hopes that Congress would deal with the thrift fund fix when it reconvenes Feb. 26. Plans to rebuild the fund could be enacted as independent legislation or attached to a bill raising the federal debt limit - or even the spending bill that will be necessary to prevent the government from shutting down in mid-March.

The savings fund rescue was approved by the House and Senate last year as part of the balanced budget bill vetoed by President Clinton.

"With the budget negotiations being where they are, and Congress turning back to what is left to do, this was the appropriate time to address this," Mr. Hawke said in an interview Tuesday.

Mr. Hawke said regulators want the thrift plan enacted as quickly as possible and have no preference whether Congress pursues independent legislation or attaches the plan to other bills.

Ms. Helfer said most fund members have refrained from pulling out their deposits, but that could change soon. "If institutions see a likelihood that legislation will not pass, they will have more incentive to move deposits," she said.

Some bank lobbyists, however, argue that the thrift fund fix isn't urgent. Many bankers oppose the thrift fund plan because it requires them to assume the bulk of $790 million in annual payments on Financing Corp. bonds used to pay for the 1987 thrift industry bailout.

Despite banks' opposition, Mr. Fiechter said he believes support for the plan is strong on Capitol Hill. "There was bipartisan support for the provisions and all indications I have received to date suggest they think this issue is worth addressing," he said.

The regulators stressed that "stopgap" measures, such as allowing premiums from banks that own thrift deposits to be used for Fico bond payments, "merely postpone" a default.

The plan calls for thrifts to pay a one-time assessment of approximately 80 cents per $100 in insured deposits. Banks would assume roughly 75% percent of the Fico obligation.

In their letter the regulators listed several major concerns:

*SAIF's inadequate reserves. As of Sept. 30, the fund had only 43 cents for each $100 in insured deposits, one-third of the required $1.25.

*Fund members have strong incentives to shift deposits to the Bank Insurance Fund. Because of inadequate reserves the thrift fund charges 23 cents per $100 of domestic deposits, while the bank fund charges less than 1 cent per $100.

*The premium differential is hurting profits of thrift fund members by putting them at a competitive disadvantage in pricing loans and deposits.

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