WASHINGTON - The Federal Deposit Insurance Corp. on Tuesday proposed slashing premiums to 4 cents for nearly 91% of the industry in the second half of 1995.

This 83% reduction from the current rate of 23 cents per $100 of domestic deposits will save the banking industry nearly $5 billion a year.

But it also sets up the potentially explosive political situation in which thrifts will pay six times what banks are charged for the government's backing.

Beyond the rate differential, a separate decision the FDIC made Tuesday could endanger the banking industry's premium reduction.

Confirming a 1992 opinion, the FDIC ruled that premiums paid on certain thrift deposits may not be used to pay for the S&L cleanup. FDIC Chairman Ricki Tigert Helfer warned that the Savings Association Insurance Fund may default on bonds issued by the Financing Corp., or FICO.

This red flag could attract congressional attention to the gaping difference in bank and thrift insurance costs. While it is impossible to predict what type of solution lawmakers may develop, it could derail the premium cuts.

Banks have been anticipating a rate cut, figuring it would kick in at midyear. The FDIC predicted that the Bank Insurance Fund will be recapitalized - that is, hold $1.25 for every $100 of insured deposits - between May 1 and July 31. But the agency will not know when the 1.25% level was reached until September, FDIC research director Roger Watson said.

The complicated procedure the FDIC must follow to cut rates will delay any reduction until the fourth quarter. However, refunds will be given - with interest - to any bank overcharged in the third quarter.

"This will substantially lower the cost of doing business for U.S. banks," Ms. Helfer said at an open meeting of the agency's board.

The FDIC chief praised the premium reduction Tuesday as a boost to the banking industry's competitiveness. Such a huge cut in expenses, she added, will free up more credit for borrowers.

Edward Yingling, the American Bankers Association's executive director of government affairs, agreed.

"That's $5 billion that can be used to provide additional credit in the economy," he said. "We also think it will be very helpful in terms of making us more competitive. It's no secret we've been losing deposits to mutual funds. Banks will be able to pay additional interest on deposits."

The FDIC plans to widen the range of risk-based premiums charged. That means rates will vary from 4 cents for the best banks to 31 cents for the riskiest banks. This 27-cent range is more than triple the current 8-cent range of 23 cents to 31 cents.

While this system rewards the best-managed and best-capitalized banks with the lowest premium, the FDIC said Tuesday that just 998 banks - or 9.3% of the industry - will pay a rate higher than 4 cents. Beyond the best rate, there are five other rates: 7 cents, 14 cents, 28 cents, and 31 cents.

The FDIC is considering whether to increase the number of rates charged.

While banks will be paying less for insurance, the FDIC Tuesday proposed continuing to charge thrifts historically high rates. The FDIC is required by law to consider bank and thrift premiums separately.

The FDIC does have the option of lowering thrift premiums to 18 cents for two years. While FDIC officials as well as acting Office of Thrift Supervision director Jonathan Fiechter played down that possibility, the agency's proposal does seek comments on the idea.

"We are very concerned that the FDIC's proposal seems to have glossed over the devastating competitive impact and inherent unfairness of a premium schedule in which the healthiest thrifts pay six times more than commercial banks," said Lou Nevins of the California League of Savings Institutions.

The thrift industry got a double dose of bad news Tuesday when the FDIC repeated its earlier opinion that SAIF deposits owned by banks may not be used to pay off the bonds that financed the S&L cleanup.

These so-called Oakar and Sasser deposits make up 28% of SAIF's assessment base. Banks pay premiums on these deposits but, under the FDIC's ruling, SAIF may not use the income to pay the $780 million annual interest tab on the FICO bonds.

This position is controversial because it limits the money available to pay FICO bonds. Right now, the interest payment eats up 44% of SAIF's revenues. As more deposits become ineligible for FICO bonds, the specter of default increases.

While FDIC board members did not offer any answers, they are clearly concerned.

"This raises some questions with respect to the service of the FICO bonds," Ms. Helfer said.

Calling the issue "an FDIC problem," Comptroller of the Currency Eugene Ludwig said, "We really have to focus on the condition of SAIF."

"This has fairly serious ramifications," Mr. Fiechter added. Suggesting Congress should get involved, he said, "I hope this acts as a catalyst."

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