WASHINGTON - An amendment approved by a House panel on Thursday would give the government more time to take action against officers, directors, and others it deems responsible for savings and loan failures.
As part of a funding measure for the Resolution Trust Corp., the House Judiciary Committee approved an amendment to extend the statute of limitations for lawsuits stemming from thrift failures by two years'
On top of an extension approved in the 1989 thrift-bailout law, the government could have five years from the time an institution is seized to file a suit.
The committee agreed to make the provision retroactive for some types of cases. Where the government believes fraud or self-dealing is involved, the provision will apply even to cases where the statute of limitations has already expired.
In cases involving negligence, however, the extension applies only to institutions for which the clock has not yet begun running.
Rep. Bill McCollum, R-Fla., had urged the panel to extend the statute of limitations only for institutions not yet in government hands. He also asked that the extension apply only to cases involving fraud or self-dealing - willful misconduct resulting in self-enrichment.
Call for Tougher Standard
Some committee members, led by Rep. John Conyers, D-Mich., argued that the cost of the thrift bailout justified a tougher standard. He wanted the statute of limitations to be extended retroactively and to include cases involving negligence - an easier test for the government to meet.
"You have one question before you today," Rep. Conyers told the panel. "Are you going to go after the people responsible for the biggest white-collar crime in the history of this country or not?"
Rep. McCollum warned, however, that permitting the statute to be extended retroactively would have a chilling effect, not only on the willingness of individuals to serve on boards of directors, but on the willingness of financial institutions to make loans.
Ultimately, the panel approving Rep. McCollum's provision, amending it to permit the statute of limitations to be e retroactively for fraud or self-dealing cases.
The approved measure is an amendment to the RTC funding bill, which was voted out of the House Banking Committee on May 5.
Because it included a provision affecting the statute of limitations on tort cases, the measure was referred to the House Judiciary Committee for additional consideration.