WASHINGTON - In a gain for banks, House Republicans seem to have rejected the Senate's fast-track approach to dealing with the undercapitalized Savings Association Insurance Fund.

Instead, House members are leaning toward a broad plan that would merge the two industries - including their charters, their insurance funds, and their regulators - in addition to infusing money into the thrift fund.

A number of House members said Senate Banking Committee Chairman Alfonse M. D'Amato's proposal to use a budget bill as a vehicle for rebuilding the fund fails to address the thrift industry's underlying problems.

"The issue is whether we have another deposit insurance crisis down the road," said Rep. Bill McCollum, R-Fla., during a hearing Wednesday before the House Banking subcommittee on financial institutions.

The House position comes as good news for banks, said Edward L. Yingling, the American Bankers Association's top lobbyist.

The Clinton administration wants to capitalize the thrift fund with a one-time fee from thrifts, a contribution from the banking industry, and a merger of the insurance funds. The ABA opposes any plan involving bank money unless the two industries are merged at the same time.

The problem for the ABA is that the Senate plan to attach funding for the thrift fund to the budget bill doesn't allow lawmakers to address broader issues. The "Byrd rule," named for former Senate Appropriations Committee Chairman Robert Byrd, stipulates that amendments to budget reconciliation bills must have a budget purpose.

As a result, House members - with the support of bankers - would prefer to address a thrift fund rescue in separate legislation. House Banking Committee Chairman Jim Leach, for one, is known to believe strongly that funding should be handled in the context of a broad bill that merges the banking and thrift industries.

The House opposition to the Senate plan could delay efforts to deal with the undercapitalized thrift fund. The problem facing thrifts is that the Bank Insurance Fund has already recapitalized.

Consequently, bank premiums will probably be lowered later this year, to an average of 4.5 cents for each $100 of domestic deposits, while thrifts will continue to pay 23 cents.

Thrifts fear they will be at a competitive disadvantage, and legislators at Wednesday's hearing almost uniformly agreed.

"At long last, the day has come where we can no longer ignore the looming BIF/SAIF issue," said Rep. Marge Roukema, R-N.J., chairwoman of the financial institutions subcommittee. "We must now act to avert a crisis before we are faced with yet another catastrophe."

"This is the most pressing bank issue before us," said Rep. John J. LaFalce, D-N.Y.

The regulators and administration officials who appeared before the subcommittee did not take issue with the broad approach urged by legislators.

"I have supported more consolidation, rather than less," said Jonathan Fiechter, acting director of the Office of Thrift Supervision. Federal Reserve Board Chairman Alan Greenspan endorsed the idea of letting thrifts have the same charter as commercial banks.

But the administration did differ with the GOP members in terms of its emphasis.

"Our No. 1 priority is getting the financial restructuring of SAIF nailed down," said Treasury Under Secretary John D. Hawke Jr.

Mr. Hawke added, however, that the administration believes the deposit insurance funds should be merged as soon as possible and no later than two years from now. He also promised to forward to the panel by early October the administration's plan to merge the two industry charters.

During the hearing, Mr. Greenspan proposed the creation of a new type of backup insurance facility to protect a merged bank-thrift insurance fund from catastrophic losses resulting from the failure of a large thrift.

The fund, which could be used to handle losses exceeding $500 million, would be financed with a small fee from current thrift fund members, Mr. Greenspan said. The fee would be paid to Treasury, which would, in effect, sell an insurance policy.

Mr. Hawke discounted the need for such a contingency, saying a merger of the two insurance funds would take care of the problem.

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