Largely restored to health, S&Ls have cleaned up their tarnished image. But as their top trade group gets a new chief, traces of the old days have resurfaced.

ORLANDO -- David E.A. Carson is gearing up to fight what he calls "the last residue of the mess of the 1970s and 1980s."

The Connecticut thrift executive, who takes the reins of the savings and loan industry's largest trade group this week, represents a business that has largely returned to profitability. But that doesn't mean the industry is home free.

Topping the agenda for Mr. Carson is the competitive disadvantage thrifts fear they will face when bank premiums drop, as they are expected to early next year. Absent congressional action, thrift premiums are expected to remain at current levels for years to come.

A second major issue involves the expected administration effort to overhaul the Federal Home Loan Bank system. As members of the Savings and Community Bankers of America gather at Walt Disney World, their institutions by and large are well-capitalized and earning record profits.

Their image has also come a long way in the past decade, when heavy-handed lobbying techniques and exotic accounting techniques finally gave way to the S&L bailout of 1989. The multibillion-dollar taxpayer-financed bailout made thrift executives pariahs on Capitol Hill.

That image has largely been reversed with the industry's return to profitability.

But in a few ways, the S&L industry is beginning to hark back to its bygone era.

First, it is once again pressing for taxpayer money to pay for part of the S&L crisis. S&Ls hope to avoid a competitive disadvantage next year by convincing Congress to add leftover Resolution Trust Corp. funds to the thrift insurance fund's pot.

Secondly, with its image and its bottom line mostly repaired, the thrift industry's clout in Congress is on the upswing.

"The reality of Congress is they have passed two good banking laws this year because they are voting for laws for the good guys who are left," Mr. Carson explained.

And finally, the industry's hubris seems to be showing its face again. Before the S&L crisis, thrifts drew on their mom-and-apple-pie image and ability to raise a ruckus in every lawmakers' district to win congressional support.

After the S&L crisis, lawmakers shied away from contacts with saving and loans, but they are starting to listen again.

Now, "the political perceptions are that every congressman knows there are survivors in their districts -- and they are nice people, basically," Mr. Carson said. "All we are doing is we are saying let's keep voting for the good guys who are left."

Mr. Carson, 60, is the president and chief executive of the nation's 20th-largest thrift, Bridgeport, Conn.'s People's Bank. The savings bank has the

nation's 35th-largest credit card operation, with a portfolio of $1.1 billion.

It is not surprising that People's is not among the most traditional thrifts -- Mr. Carson is a newcomer of sorts to the thrift industry. He joined it a decade ago from the insurance industry.

Nevertheless, he has a simple message for SCBA's member thrifts: "Stay close to your community and keep running your institutions in a sound financial fashion and work with us to continue to put the past behind us so that we can all grow in the future."

The new SCBA chairman is best known around Washington for his fondness for bright bow ties. He has strawberry blond hair, a quick smile, blue eyes, and glasses he puts on when he reads.

He is said to be close to the Senate Banking Committee's Christopher J. Dodd, a Democrat from his home state. Sen. Dodd is expected to be the committee's second-ranking Democrat next year if the Democrats retain control of the Senate. Sen. Dodd is the only senator who plans to attend the SCBA conference.

As a prominent Connecticut businessman, Mr. Carson also is friendly with much of the Connecticut Congressional delegation. And he should have a good idea of how Washington works because his son Peter Carson is the legislative director for Rep. Christopher Shays, R-Conn.

Back at home, Mr. Carson -- who became a grandfather last month -- is involved in a smattering of community activities, particularly arts and education initiatives. He took off his bow tie long enough to pull on tights and a robe and portray a duke, a prince and a king in walk-on roles for the Connecticut Ballet Theater.

While regulators rated his thrift "outstanding" under the Community Reinvestment Act, his relationships with local community groups are mixed.

One housing advocacy group was repeatedly rebuffed in its attempts to establish relations with People's Bank executives.

Doris G. Latorre, director of Connecticut's Association of Community Organizations for Reform Now, said her group eventually got a meeting with the bank, but only after it protested in front of the bank's headquarters.

However, Ms. Latorre said, "Ever since we started working together, they have been a very good bank to work with."

Acorn gives credit counseling to low-income and moderate-income borrowers and screens them for cut-rate loans with special underwriting standards. Four Connecticut banks participate, she said. In the last year, Peoples has made 40 Acorn loans, she said.

But another local nonprofit which specializes in low-income housing rehabilitation has had a far different experience.

Richard J. Myers, the Director of Bridgeport Neighborhood Housing Services, said, "People's is extremely supportive of all of our programs and always has been." His group has worked with Mr. Carson's thrift for the past decade.

While Mr. Carson says compliance with the CRA and fair lending laws is good business, Mr. Carson also believes the Clinton administration is over-reaching in those areas.

The single issue in which SCBA is furthest from agreeing with the Clinton Administration is, "The attempt to make HUD [the Department of Housing and Urban Development] a regulator," he said, calling the movement, "a misdirected public policy."

"I blame it on the failure of the Clinton administration to come up with a decent urban policy," Mr. Carson said. "They'll kind of throw it at the banks and say why don't you guys figure out how to solve these problems of the cities."

At the same time, he said SCBA members should be involved in their communities if they want to avoid the problems of Chevy Chase Savings Bank and others who have settled fair lending charges with the Justice Department.

"If you stay close to your community, that's the best way to avoid it," he said. "You can't just have the appearance of doing it, you have to be actively doing it."

Mr. Carson said bureaucrats in Washington don't have a clear understanding of what is happening nationwide.

"They see it as the problem that they see right outside their window, unfortunately, and that's not necessarily the problem in the rest of the country," he said.

"Communities are very different around this country and the perception of regulated institutions is that the regulators don't have a full understanding of all the communities," Mr. Carson said.

His own community, Bridgeport, consists of a dangerous and poor inner city surrounded by the lush landscape of wealthy Fairfield County.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.