Donna Aiko Tanoue is on borrowed time. Literally.

The Federal Deposit Insurance Corp.'s new chairman inherited half of her predecessor's uncompleted term, leaving her with just two and a half years to achieve results.

Her top priority for the agency has a similarly crushing deadline: getting banks ready for Jan. 1, 2000.

"That's my most immediate concern," she said in her first extensive interview since assuming the chairmanship on May 26.

According to the 44-year-old attorney, the FDIC is worried enough about bank failures stemming from year-2000 computer glitches that the agency is reconsidering plans to close its asset-disposition office in Hartford, Conn. Staffing in other divisions might also be beefed up, she said.

Ms. Tanoue (pronounced ta-NOY) said she is concerned not only about how banks are proceeding on the issue but also about how consumers are perceiving the dangers.

"Keeping consumers informed will be critical to maintaining public confidence," she said. "I believe strongly that if consumers understand what's going on, if they believe that they're being provided (accurate) information, they'll be far less likely to act in ways that might be detrimental to our insured institutions or to the broader economy."

Meanwhile, Ms. Tanoue, a former commissioner of Hawaii's 30-examiner banking agency, is taking stock of the sweeping structural changes under way in banking.

"There's no doubt that consolidation will continue," she said. Megamergers "present enormous issues to this agency," affecting both supervision and the insurance funds, she said. Ms. Tanoue has asked her staff to draft papers on the subject.

But "notwithstanding the recent dramatic announcements of large mergers, I believe that we'll continue to see very strong community banks," she said.

"Secondly, I think the blurring of lines between different types of providers of financial services will continue," said Ms. Tanoue, whose term ends in October 2000. "And it will actually accelerate if the Congress goes forth with modernization legislation."

Generally, Ms. Tanoue's positions on the top policy issues mirror those of her predecessors. She would merge the bank and thrift insurance funds to increase their strength, shatter Glass-Steagall barriers between financial industries, and let banks conduct nonbank commerce through either a direct subsidiary or a holding company affiliate.

Given her abbreviated term, Ms. Tanoue is unlikely to pursue any big structural or personnel changes in the agency. Instead, observers say, she probably will proceed in the thoughtful, deliberate manner that has marked her work in the past.

That is not to say she will shy away from controversy. She has already jumped into the fray over how banks should conduct nonbank business-a longtime tussle between the Federal Reserve Board, which regulates bank holding companies, and the Comptroller of the Currency, which regulates national banks.

"With adequate safeguards, both approaches provide adequate safety and soundness protections, and we believe that banks should have the choice," Ms. Tanoue said.

"We're the honest broker here."

By contrast, legislation passed in May by the House would not let bank subsidiaries underwrite insurance or securities.

Certainly, Ms. Tanoue has brokered deals before.

When several Hawaii thrifts failed in the 1980s, Ms. Tanoue crafted a pact between the state legislature and bankers to repay depositors 100 cents on the dollar-and in the process achieved a certain fame.

"Donna was really the architect of that cooperative payback plan," said Mary Bitterman, a Hawaii cabinet member who appointed Ms. Tanoue to be the state's first bank cop. "She had to interact with legislators, with industry leaders, and with the community."

Ms. Tanoue later transferred the remaining institutions from their underfunded insurance plan to the FDIC's, and followed up by issuing clearer rules on licensing, examinations, and supervision.

"Throughout that adversity, she had a vision of where she wanted this to end up," said Lawrence M. Johnson, chairman and chief executive officer of the Bank of Hawaii, a former legal client of Ms. Tanoue's.

"She can be extremely tough," said Sen. Daniel K. Inouye, a Hawaii Democrat who hired Ms. Tanoue to run his 1992 reelection campaign and employed her husband as a legislative assistant nearly 20 years ago.

According to the Senator, Ms. Tanoue understood that in the process of resolving the state's thrift crisis, "well-known people might get hurt. And she said, 'Well, the only thing you can do is to do the right thing, (even) if it hurts important people.'"

One of those important people was Honolulu attorney Gary Dubin. Mr. Dubin claims Ms. Tanoue unfairly denied him a license to buy a failed trust company. He suspects Hawaii's big banks pressured her not to introduce a new competitor.

Another person hurt in the rescue process was Hirotoshi Yamamoto, owner of the failed industrial loan company Manoa Finance. Mr. Yamamoto claimed Ms. Tanoue prematurely closed his thrift at the behest of Hawaii's largest banks, which he said needed an excuse to thin competition.

Bank of Hawaii's Mr. Johnson took issue with Mr. Yamamoto's charge. "(Ms. Tanoue) was able to save the depositors many millions of dollars," he said.

Despite the largely positive response she received for resolving the state's thrift crisis, Ms. Tanoue did not want to remain in government forever.

In 1987, she resigned her post to join Hawaii's largest law firm, Goodsill Anderson Quinn & Stifel. There she practiced real estate law and guided companies like American Savings Bank and the Long-Term Credit Bank of Japan through the regulatory minefield.

Despite two leaves of absence, Ms. Tanoue was content until one night last year, when an acquaintance named Delmond Won left word about the FDIC slot on her answering machine.

Ms. Tanoue did not tarry. Later that night, she excitedly updated her resume and faxed it to the White House personnel office. Other than for a few bankers, she told no one what she had done.

"They might've thought I was slightly touched," said Ms. Tanoue.

"She didn't think she had a chance in hell," said Mr. Won.

In the end, of course, she prevailed.

But the timing of her arrival made Ms. Tanoue a virtual hostage to the year-2000 issue. She wasted no time seizing the reins.

"It's just too early to say" how many banks and thrifts will fail due to the bug, Ms. Tanoue said. The agency will formally forecast the number at yearend, and will revise that estimate in early 1999 upon completion of the testing phase, in which banks simulate key date changes on their repaired systems.

Ms. Tanoue did say that as of June 30, regulators had judged 46 banks and thrifts nationwide "unsatisfactory." But she cautioned that the figure is not necessarily predictive of actual failures, which could end up higher or lower.

She also called President Clinton's year-2000 "Good Samaritan" bill- which would provide a safe harbor to companies that make erroneous but good-faith disclosures about their own year-2000 readiness or a vendor's- "probably the single-most important piece of legislation" next to financial modernization.

At times, Ms. Tanoue seems almost awed by her ascent to the Chairman's seat. But when she needs inspiration, she looks no further than her own family tree.

Ms. Tanoue's grandmother, a Japanese immigrant, sold saimin noodles from a cart after tiring of the strenuous work of Hawaii's sugar plantations.

Grandma Nobu eventually earned enough money to open a restaurant and put her son, Ms. Tanoue's father, through the University of Chicago medical school.

"That generation was very industrious," said Ms. Tanoue.

Clearly, the noodle doesn't fall far from the cart.

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