LEXINGTON, Ky. - The president of the Independent Bankers Association of America blasted the American Bankers Association last week for "keeping its head in the sand" on the deposit insurance premium controversy.

Richard L. Mount, president of the IBAA, said the ABA's approach to this issue will probably result in banks' having to share the cost of recapitalizing the Savings Association Insurance Fund, the thrift industry's deposit insurer.

"I don't understand the ABA's position," Mr. Mount told about 100 Kentucky community bankers at their annual convention here. "By shutting its eyes, it's shooting itself in the foot."

Mr. Mount, who is also president and chief executive of $86 million- asset Saratoga National Bank in California, stressed that the two nationwide banking groups should be united on trying to reduce Bank Insurance Fund premiums and on keeping the bank fund and the thrift fund separate.

The bank deposit insurance premium probably will be reduced to around 4 cents for every $100 of domestic deposits this year because the bank fund has nearly been recapitalized. Mr. Mount said he believes the premium could be cut to 2 cents, however.

Each 1-cent premium reduction saves a $50 million-asset bank $5,000, he said.

Though the bank fund has nearly reached its congressionally mandated reserve level of $1.25 for every $100 of deposits, the thrift fund probably will not reach that level until early in the next century, industry officials have said.

Mr. Mount said this disparity between industries, which will probably worsen because of the decreasing assessment base of thrift deposits, should be addressed by capturing the roughly $14 billion in unused funds allocated to the thrift bailout agency, the Resolution Trust Corp., which will be shut down Dec. 31.

Unless the ABA joins the fight, however, this possible solution probably will be ignored, he said.

The longer the ABA "plays the game of keeping its head in the sand, the more likely we are to participate in solving the problem," said Mr. Mount. "We will strongly oppose any attempt to merge the funds."

An ABA spokeswoman said the association opposes banks' having to participate in a bailout of the thrift fund.

"We don't feel that there is an immediate problem," said Nancy N. Judy, the ABA spokeswoman, referring to a BIF-SAIF merger. "It's worthwhile discussing options and different ways to proceed, but not if the only solution is that bankers should pay.

"We're using our full lobbying force to get premiums reduced, first and foremost," she said.

Kenneth Guenther, executive director of the IBAA, said its difference with the ABA on this issue is that it recognizes there is a "SAIF-Fico" problem. Financing Corp., or Fico, was created in 1987 to issue bonds that would begin the thrift industry cleanup. Annual interest payments on those bonds are a major drain on the thrift fund.

"The ABA position is essentially 'no problem,'" Mr. Guenther said. "As a result, the bankers are being set up for a banking solution."

***

What Mr. Mount didn't say may have been more noteworthy than what he did - at least regarding interstate branching and banking, said a banking lawyer at the convention.

R. James Strauss, a Louisville, Ky.-based lawyer, told the gathering of community bankers after Mr. Mount's speech that he thought Mr. Mount's sparse references to interstate branching indicated that it's pretty much a done deal.

Kentucky, one of the few states that bans statewide branching, must prepare for this reality, whether it eventually opts in or opts out of the federal legislation, known as the Riegle-Neal Interstate Branching and Banking Efficiency Act, Mr. Strauss said.

Among other negatives about the bill that were discussed, interstate branching would allow more big, out-of-state banks into the state, which would gobble up small banks and subsequently reduce competition, some bankers said.

This contradicts the popular notion that interstate branching means more competition, they pointed out.

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