To the Editor:
Your story on the Obama administration's misguided proposal to eliminate the thrift charter ["Arguments for Keeping Thrifts May Be Fading," July 7] makes an "inside the beltway" argument that fails to recognize the negative impact that abolishing that charter would have in real communities across our country.
There is a strong case for keeping the thrift charter. Thrifts are experts at real estate lending. Their business is a model that works in good times and bad. They have taken the lead in re-establishing economic growth — whether it's the thrifts that did the lending to rebuild New Orleans, or those that are leading community development plans from coast to coast to put Americans back to work.
Charter choice has served our country and our varied communities well. Eliminating the thrift charter would hurt savings and loans as well as mutual institutions and mutual holding companies.
We have 800-plus thrift institutions and another 150 MHCs representing 10% of the banking industry and many of which are well over 100 years old. They are truly the traditional banks that are lending, that have been lending and will continue to lend. Forcing these institutions to change their charter and business plan is disruptive, costly and wholly unnecessary. Having these institutions shift their focus at this time deprives our nation of a continuity of lending at a time when we need more credit availability, not less.
For millions of Americans, the thrift charter has brought them the American dream — a home of their own. Thrifts lend for the good of the customer and the good of the community and they produce a third of the mortgage lending that occurs in our country.
Toxic subprime mortgages were not and are not the business of the traditional thrifts. Lenders who made those loans are out of business. Abolishing the thrift charter would exact retribution over a group that had nothing to do with the crisis we are in, and calls into question the rationale for change for the sake of change.
Abolishing the thrift charter will not fix the problems the nation confronts because this issue is really more complicated than that.
The recent crisis revealed failures by all of the regulators. Singling out OTS will not fix the gaps that existed. The better solution is to fill the gaps in regulation, not eliminate the charter that has worked for tens of millions of homeowners and tens of thousands of communities.
Charter choice is still the right path for this country. The U.S. economic system is not a monolith. It provides a diverse system for a diverse country. The thrift charter has helped build our economy and eliminating it would cure nothing at all.Diane Casey-Landry
Chief operating officer
American Bankers Association