WASHINGTON - The Republican party platform is taking indirect aim at supervisory goodwill, a key element of the Bush administration's thrift-bailout policy.
Although supervisory goodwill is not mentioned specifically, one section of the platform warns of the danger of "regulatory taking" of private property, and calls for compensation.
Rep. Bill McCollum, R-Fla., the sponsor of legislation to compensate some thrifts for a change in the treatment of supervisory goodwill, said the "property rights" plank will bolster his argument in Congress this fall.
Under the 1989 thrift-bailout law, supervisory goodwill has to be written off by Jan. 1, 1995. The intangible asset, which was included in thrifts' capital, previously would have been amortized over as much as 40 years under agreements negotiated with regulators.
Some thrifts that have sued to overturn the 1989 policy change have invoked the same "takings" argument that the Republicans are set to endorse.
"We support legislation to require full compensation of property owners who are victims of regulatory takings," concludes the document, which will be voted on this week at the Republican National Convention.
Rep. McCollum said the "would expect to see those words come back" to help his effort to compensate the thrifts taking goodwill off their books.
Rep. McCollum, a House Banking Committee member and co-chairman of the Republican platform committee, said he did not sponsor the language. Moreover, he said, it was not aimed directly at supervisory goodwill.
"I would concede, however, that it appears to cover supervisory goodwill," he said.
Though the platform is only a draft document until approved by the full convention, the property section is unlikely to be challenged.
Rep. McCollum has argued that the government will save money if it compensates otherwise viable thrifts that are in danger of being seized only because of the requirement that they accelerate the phaseout of goodwill.
If the House takes up funding legislation for the Resolution Trust Corp. this fall, it is likely that Rep. McCollum would get a vote on his amendment.
Given the lingering congressional animosity toward the thrift bailout, most observers believe the amendment would be rejected.
Swipe at Democrats
The Republican platform, which in theory embodies the principles on which its presidential candidate will run, otherwise endorses George Bush's record on banking and financial services issues.
A section on "banking and job creation" argues that the Democratic-controlled Congress "stalled Republican legislation to prevent the savings and loan crisis."
The document also takes the Democrats to task for blocking the administration's effort in 1991 to overhaul the banking and financial services industry.
Platform writers vigorously applauded the President's efforts to ease the credit crunch. They wrote:
"We endorse his efforts to restrain overzealous regulators, reduce regulatory compliance costs, strengthen financial institutions through diversification, and reduce unnecessary barriers to lending."