Talks over a balanced-budget deal are close to collapse, and the plan to replenish the thrift insurance fund could crash with them.

The Savings Association Insurance Fund bailout was tucked in the budget bill this summer to shield the plan from attacks - the budget measure is not open to amendment - but observers here say that strategy could doom the rescue if Congress and the White House can't make come to terms.

The bill would have forced thrifts to ante up roughly 80 cents for every $100 in insured deposits, while requiring banks to pay $600 million annually for 23 years to help pay off Financing Corp. bonds used to fund the last thrift bailout.

"My take is if the balanced-budget bill dies, it would appear that the Fico payments and the premium assessment die with it," said Samuel Baptista, president of the Financial Services Council.

So far, legislators are not pursuing alternatives.

"People haven't focused on it at all," said Edward L. Yingling, chief lobbyist for the American Bankers Association.

Still, lawmakers have options if they want to move the thrift fix quickly. If the budget talks fail, Congress will probably pass a "continuing resolution" to keep the government running through the fiscal year. The thrift plan could be added to that legislation.

Also, House Banking Chairman Jim Leach has said he may push a stand- alone bill passed by his panel's financial institutions subcommittee this fall.

Another option is to do nothing. It may take months to prepare an alternative, and Congress faces a session abbreviated by elections, leaving precious little time to craft a new plan.

It doesn't help that Sen. D'Amato hasn't weighed in on alternatives. Lobbyists predicted he will let Rep. Leach take the lead, given his involvement in the Whitewater investigation.

Mr. Yingling suggested that because the thrift fund's reserves are climbing, the bailout isn't even necessary.

Paul Schosberg, president of America's Community Bankers, the thrift trade group, dismisses suggestions that the fix is no longer critical. Without the special assessment and Fico sharing, thrifts will be faced with a whopping 23 basis point difference between their deposit insurance premiums and the premiums of banks, most of which now pay nothing for their insurance.

"We now face the stark reality of giving deposit insurance away to one segment of the banking industry while another is stuck with 23 basis points," he said. The result: deposits will flee the thrift fund either through acquisition by banks or through converting to state-chartered banks.

As deposits leave, the thrift fund will again become unstable, he said. "The factors speculated about 11 months ago are now present," Mr. Schosberg said.

Mr. Schosberg also questioned whether banks will really want to fight the Fico obligation. After all, he said, the thrift fix also contains some big plums for banks: a cap limiting insurance fund reserves to $1.25 for every $100 in insured deposits and mandatory rebates of surplus insurance funds. But the ABA is willing to give up those benefits if the Fico sharing could be killed, Mr. Yingling said.

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