WASHINGTON - In a victory for banks, the House Banking Committee voted to limit the Federal Deposit Insurance Corp.'s authority to build reserves beyond the 1.25% ratio set by law.

An amendment sponsored by Chairman Jim Leach and other key Republicans responds to bankers' fears that the FDIC plans to charge higher premiums than it needs in order to continue building the fund.

The bill would still leave the agency some flexibility to build reserves beyond $1.25 for each $100 of insured deposits "when economic circumstances dictate." But the FDIC complained that the measure would set up a pay-as- you-go system that would subject banks to sharply fluctuating premiums.

In addition, the amendment "would force the FDIC to set premiums at zero for all insured institutions in good economic times when no premium income is needed," the agency said in a letter to Rep. Leach signed by Chairman Ricki Helfer and by Jonathan Fiechter, acting director of the Office of Thrift Supervision .

The action on the insurance premiums came as the Banking Committee took up a budget balancing bill that has been expanded to include legislation that would essentially merge the bank and thrift industries.

The amendment approved on Tuesday also attempts to deal with some of the thorniest issues involved in merging the two industries: what to do about savings institutions that have powers beyond those granted to banks.

The amendment would preserve, or grandfather, the special powers of unitary thrift holding companies - those that own only one thrift - setting up a class of institutions that bankers say would have all the powers of national banks and then some.

In a compromise, the amendment would permit grandfathered unitaries to continue to exercise powers now lawful. Initially the bill would only have permitted them to continue in activities they were already engaged in.

But Patrick Forte, president of the Association of Financial Services Holding Companies, said the bill imposes too many restrictions on the unitaries for the grandfathering to have much value.

For example, he said, unitaries that maintain affiliations with nonbanks would not be able to use the word "national" in their name. Those thrifts would also be subject to the qualified thrift lender test, which requires them to invest most of their assets in housing-related loans.

While the unitaries would be grandfathered permanently, other thrifts would lose special powers they enjoy, such as the authority to invest in real estate, within five years.

Charles J. "Bud" Koch, chairman of Charter One Financial Corp., Cleveland, said five years would be enough time to phase out of real estate activities. But he expressed concern that the bill would also end the thrift industry's interstate branching authority.

Today, he said, his bank can branch anywhere in the country with approval of a single regulator. Once his institution becomes a national bank, he will be unable to branch into states that opt out of the new interstate law and will be required to seek additional regulatory approvals.

The committee also voted to permit mutual thrifts to become either state or federally chartered commercial banks while maintaining their depositor ownership.

"Merely grandfathering approximately 1,100 institutions with $200 billion in assets could relegate them to the archives of the financial services industry," said Rep. John LaFalce, D-N.Y. "They deserve better than that."

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