WASHINGTON -- Congress may soon curb the practice of mutual thrifts changing their federal charters to state charters in order to convert to publicly traded companies under new, flexible state laws.
Both the House and Senate Banking Committees are expected to draft legislation on the conversions, which enable executives to capture large blocks of free or low-priced stock, before the end of the 1993 session.
In the House, the banking panel will be debating the merits of extending the federal stock-conversion guidelines to state-chartered thrifts, an aide said.
Power of the FDIC
"We are looking at it, it is just a time factor," said the aide, noting that the committee might take action later this month.
The the Senate banking panel will address the freedom of "banks and thrifts that don't like their existing regulators (to) sort of shop around." a committee aide said. The committee may add an amendment to the next banking legislation that comes up for a vote.
However, the House aide said that because the Federal Deposit Insurance Corp. is the secondary regulator for such state-chartered thrifts, it could squelch the practice on its own.