The Supreme Court begins its 1996-97 term today ready to resolve two lingering disputes from the banking and thrift crises of the last economic downturn.

In cases set for argument on Nov. 4, the court will decide the standard of proof the government must meet when it sues directors and officers of failed institutions for negligence and when it prosecutes borrowers who falsified loan documents.

The Supreme Court also will hear arguments on Nov. 13 on whether the Commodity Futures Trading Commission can regulate foreign currency options not traded on an exchange.

The court has so far refused to take any other banking cases, but several petitions are still pending.

Most notable are appeals questioning the seizure of assets from a healthy bank to pay off claims at a failed affiliate and the voiding of oral contracts between failed institutions and their customers. The high court also has been asked to decide the tax status of production credit associations, the legality of forced-placed insurance, and the breadth of a state's right to regulate the Retirement CD.

"They will do some important work," said Michael Crotty, deputy general counsel for litigation at the American Bankers Association. "But we don't expect the volume of cases important to us that there were last year. Last year was just astounding, unprecedented, and never to be replicated."

In its 1995-96 term, the Supreme Court ruled that states cannot prevent national banks from selling insurance in small towns. It also said the government is liable for eliminating regulatory goodwill and that credit card companies can ignore state laws limiting membership fees and penalties for late payments.

While last year's cases blazed new ground, this year's docket is more likely to resolve pesky legal questions that have tied up the lower courts for years.

In United States v. Atherton, the justices will decide if the Federal Deposit Insurance Corp. can sue directors and officers of failed banks and thrifts for simple negligence, which means their mistakes contributed to the institution's demise.

Most of the lower courts have ruled that the 1989 thrift bailout law requires the government to use the harder-to-prove claim of gross negligence, which means the officials knew or should have known that their decisions would hurt the institution.

The FDIC, however, has argued that the federal government has an inherent right to bring simple negligence claims. The federal appeals court in Philadelphia agreed, setting up a conflict among the lower courts. The case stems from the December 1989 failure of City Federal Savings Bank, Bedminster, N.J.

The justices must decide in United States v. Wells whether the government can prosecute people who falsified loan documents, even if the lies did not affect the bank's credit decision.

The case arises from a 1987 loan by O'Bannon Bank in Missouri to Jerry E. Wells and Kenneth R. Steele, the owners of a copier service business. The government charged that the borrowers did not disclose all the company's liabilities and that they forged their wives' signatures on personal loan guarantees. The federal appeals court in St. Louis overturned the guilty verdict, saying the government must prove the lies affected the bank's loan decision.

The Supreme Court also will decide in Dunn v. Commodity Futures Trading Commission the limits on the agency's authority to regulate foreign currency options. The federal appeals courts in New York and Richmond, Va., disagree on whether Congress exempted all foreign currency deals from the commission's reach or just those at banks.

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