WASHINGTON - Another group of banks with thrift deposits is mounting a lobbying campaign to get its tab for the Savings Association Insurance Fund rescue reduced.
The 11th-hour campaign is being led by Gordon W. Campbell, chairman of St. Petersburg, Fla.-based Mercantile Bank - one of the so-called Sasser banks. These are former thrifts that switched charters after 1989 and continue to pay premiums to the savings industry fund.
The Sasser banks would like to join the ranks of the nation's "Oakar" institutions, which bought savings and loans and merged the deposits into the bank. Premiums on those deposits are paid to the thrift fund.
The House Banking Committee recently approved an amendment permitting Oakar banks to transfer their thrift deposits to the Bank Insurance Fund simply by paying a 66-basis-point entrance fee. Without that provision, the Oakars would have been hit with 85-basis-point fee on all thrift deposits in order to capitalize the thrift insurance fund.
"I was alarmed to find out that the Oakar bank lobbying effort has won, for them, a reduction of the one-time SAIF assessment to about 65-basis points," Mr. Campbell wrote in a Oct. 2 letter to other Sasser institutions, of which their are about 300. "There are so few Sasser banks in the country ... that it is obvious we have been overlooked up to this point."
Mr. Campbell's letter raised the ire of Robert Davis, chief economist for America's Community Bankers, the thrift industry's primary trade group.
"How much money will they steal from other people to escape their obligations?" Mr. Davis asked. "This is just special interest pleading." He estimated that if Sasser institutions were to get the same break as the Oakars, the thrift industry would have to shoulder as much as an extra $56 million.
The House Banking Committee amendment requires other institutions insured by the thrift fund, including Sassers, to pay for the more lenient treatment granted to Oakars. All told, the Oakar measure adds an additional $150 million to the thrift industry tab.
Sasser banks get their name from Jim Sasser, then a Democratic senator from Tennessee, who wrote the law mandating that thrifts converting to bank charters after 1989 be regulated as banks but continue to be insured by the thrift fund. Oakars are named for former Ohio congresswoman Mary Rose Oakar, also a Democrat.
Mr. Campbell appealed for help to 125 Sasser institutions, and said he has received responses from about 25 - all of which are behind his effort.
While Oakars won more lenient treatment from the House Banking Committee, they face a major problem with the U.S. tax code.
An "entrance fee" to join the Bank Insurance Fund, as the 66-basis-point charge to Oakars is referred to in the legislation, is not tax deductible, according to the Internal Revenue Service. If Oakar banks cannot deduct the charge, their after-tax expense would be significantly higher than the current 85-basis-point fee they would be required to pay.
But lobbyists for Oakar banks argue that calling the charge to their clients an entrance fee is simply a glitch in the legislative language.