At a high-level meeting on financial reform legislation last week, Rep. Jim Leach suggested a compromise on the issue of unitary thrift holding companies.

Rep. Leach said he would support the merger of the bank and thrift deposit insurance funds if fellow House and Senate Banking committee leaders would agree to prohibit commercial firms from buying unitary thrifts. The legislation would bar the creation of new unitary thrifts, but the House version would permit existing unitaries to be sold, whereas the Senate version would not. Neither the House nor Senate version would merge the funds.

Bank and thrift lobbyists were unimpressed.

Executive director Edward L. Yingling said the American Bankers Association would consider merging the funds only if two other issues were put on the table: insurance fund rebates and merging the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

Robert R. Davis, director of government relations at America's Community Bankers, said Rep. Leach's proposal would mix a good proposal -- merging the insurance funds -- with a bad one. -- Scott Barancik

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