WASHINGTON - The Senate Banking Committee voted Wednesday to give banks that bought thrift deposits a break on the bill for fixing the Savings Association Insurance Fund.

Though the legislation would require thrifts to pay a special assessment of 85 cents on each $100 of deposits, banks would be allowed to subtract 5% of their thrift deposits before the fee was levied.

"That's not much" help, said Carol Van Cleef, a lawyer who represents a number of the banks that own thrift deposits.

The House Banking Committee on Tuesday gave the Federal Deposit Insurance Corp. discretion to reduce by up to one-third the tab for banks that own thrift deposits.

In approving legislation aimed at balancing the federal budget, the Senate panel also set a timetable for merging the bank and thrift industries.

However, its approach was less direct than that of the House Banking Committee, which called for a merger of both the insurance funds and the two industries' charters by Jan. 1, 1998.

The Senate bill calls for a merger of the two insurance funds, but it would condition that union on the adoption of additional legislation to combine the bank and thrift charters.

"Linking the insurance fund merger with the charter merger is critical," said Sen. Bill Frist, R-Tenn., sponsor of the amendment requiring an industry merger.

Chairman Alfonse M. D'Amato of the Senate panel said he did not want to tackle issues surrounding a charter merger in the budget package because there has not been enough time to study the issue.

"I don't mean to belittle the efforts of my colleagues in the House, but (their) bill has some precipitous provisions," the New York Republican said. "I want to take a very thoughtful approach and give us time to deal with the very complex tax questions."

Lobbyists representing the banks known as Oakars, after the former Ohio congresswoman who wrote the law permitting them to acquire thrift deposits, are concerned that the FDIC will not agree to give them a break.

Moreover, the House bill requires that any discount be budget neutral - a provision that makes it more difficult for the FDIC to give the Oakars a discount.

"The key story, though, is the sympathy that was expressed for the position of the Oakar banks," said Ms. Van Cleef, a partner with Katten, Munchin & Zavis.

"They don't have all the deposits that are attributed to them," she added.

The Oakar institutions are assessed as though they are thrifts on a base of deposits that were held at the time they were purchased even though, they argue, a significant part of those deposits have long since left the bank.

Regulators say that the deposit runoff was factored into the purchase price when the deposits were bought.

House and Senate negotiators will be appointed to reconcile the different approaches taken by the House and Senate panels.

Among the factors that need to be determined in merging the thrift and bank charters are whether thrifts will be forced to repay the bad-debt reserve deduction they have been allowed for 42 years, whether unitary thrift holding companies can maintain some of their special powers, and how long other thrifts have to phase out activities now forbidden to banks.

Referring to the January 1998 deadline, Sen. Frist said: "I believe two years and three months is more than enough to draft legislation to merge the charters."

Bank industry lobbyists have argued that the charters should be merged, but that thrifts should not be allowed to preserve special powers they currently have.

The Senate bill also differs from that of the House in that it allows for later resolution of the many thorny issues involved in merging the charters. It also calls for the elimination of state-chartered thrifts, whereas the House committee appears determined to preserve the right of states to charter thrifts.

The Senate bill, part of a $2.4 billion budget package, also obliges commercial banks to help pay for the bonds issued in 1989 to bail out the thrift industry. With the special assessment, the package is supposed to save $900 million over seven years.

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