American International Group Inc. and Equitable Cos. have joined the parade of insurance companies seeking a thrift charter.
That brings to seven the number of insurers that want to control a thrift before legislation pending in Congress eliminates the charter.
The application filed May 11 by a unit of Travelers Group Inc. was supposed to be decided by Oct. 25, but the Office of Thrift Supervision extended the deadline for action to Nov. 24. OTS officials said they simply needed more information from the New York-based insurer. Last week the OTS also indefinitely extended its review of the application filed by Principal Mutual Life Insurance Co., Des Moines.
"The proposed marketing of loan and deposit products and transactions with affiliates," the OTS told Principal's lawyers in an Oct. 31 letter, "raises significant issues of law and policy."
OTS officials refused to comment further on Principal's application. However, agency spokesman Bill Fulwider said the OTS is not delaying action on any of the applications to avoid criticism from lawmakers.
"It has nothing to do with what's happening in Congress," he said. "We deal with each application on a case-by-case basis, on its own merits."
The financial reform package pending in the House would require all thrifts to convert to bank charters within two years of enactment. The special powers and ownership privileges of existing thrifts would be protected. However, that protection would be lost when an institution is sold.
The public portion of AIG's application said it plans to charter a federal savings bank with $6 million in cash "to enhance its services to, and expand its relations with, its customers and brokers by ... offering innovative, value-added products and services."
Equitable wants to charter a federal savings bank with $4.57 million in capital. Frontier FSB would absorb Equitable's trust unit, Frontier Trust Co.
Equitable said initially it plans to use its thrift charter to market trust services nationwide. In the future, Frontier FSB may market and distribute additional financial products and services, according to the application.
So far this year, the OTS has received 40 charter applications, roughly twice the 1996 volume. The other insurance companies seeking thrifts are State Farm Mutual Automobile Insurance Co., Transamerica Corp., and Reliastar Financial Corp.