WASHINGTON - The Federal Deposit Insurance Corp. chairman went on the offensive Wednesday against fast-growing banking operations, saying they should pay premiums on the billions of dollars they have shifted to insured accounts.

Donna Tanoue said that will be part of the pricing system her agency plans to recommend to Congress this month.

She spoke before more than 1,200 bankers at the Independent Community Bankers of America's annual meeting in Las Vegas.

Ms. Tanoue also said the FDIC would recommend a merger of the bank and thrift insurance funds, rebates based on past contributions to the fund, and other changes.

She sharpened her warnings about the urgency of reforming the deposit insurance system in the face of an economic slowdown. Banks last year broke a string of eight consecutive years of record earnings, she said. "The distant cloud is a reminder that good times don't last forever. When bad times return, more banks will naturally fail."

But her strongest remarks were directed toward the fast-growing institutions that contributed to a 6% increase of insured deposits last year, far above the historical 3% annual growth rate. She reiterated that the sudden inflow of deposits could dilute the Bank Insurance Fund to the point that all banks would have to start paying premiums for the first time in five years.

"While this deposit growth is a successful and legitimate activity, there is no denying that over time it could contribute to a large enough dilution of reserves to trigger premium payments by all banks," Ms. Tanoue said.

Several major companies such as Salomon Smith Barney have attracted attention by moving funds from uninsured sweep accounts to insured accounts, but Merrill Lynch & Co. in particular has been a lightning rod for criticism after moving more than $48 billion into insured accounts during the past nine months.

Though Ms. Tanoue avoided mentioning Merrill or other companies by name, her remarks came just days after Merrill sent a comment letter to the agency suggesting reforms that would not focus on the amount of insured deposits but instead on a bank's capital and management.

Ms. Tanoue seemed to issue a firm reply to Merrill - pay up.

The agency's plan would probably include instituting premiums on all institutions, which would be determined by its Camels rating, financial ratios, and whether the bank is new or exceptionally fast-growing, Ms. Tanoue said.

She advocated eliminating the current statutory minimum of $1.25 in federal reserves for every $100 of insured deposits, and replacing it with a more flexible target. If reserves dip below the 1.25% ratio and are not replenished within a year, all institutions would have to pay a 23 basis-point premium.

"Eliminating the hard target would remove the specter of 23 basis-point premiums, the most tangible threat from new deposits," Ms. Tanoue said. "Regular risk-based premiums would mean that fast growers would pay for bringing new deposits into the system."

Furthermore, she said she would grant the banking industry a key concession in the debate over deposit insurance - rebates. If the funds grew too far beyond the "flexible" target set by the agency, institutions should be entitled to an "adjustment or rebate" that could be based on their past contributions into the fund, Ms. Tanoue said.

That move, too, seemed calculated to benefit longtime members of the industry, and leave de novos and institutions such as Merrill with a bigger premium check. Because institutions would pay a premium based at least in part on their deposit base, but receive a rebate based on past contributions, those smaller banks that have contributed the longest would likely receive the biggest benefit.

Ms. Tanoue argued that in the long run the system would balance itself out. "Over time 'new money' would replace 'old money.' If there is an adjustment based on past contributions to the fund, those banks that built the fund would benefit."

She also returned to the controversial subject of raising the deposit insurance coverage limit above $100,000 per account, an idea she first broached at the ICBA conference last year. Ms. Tanoue said that the agency would recommend indexing the limit to inflation, but dodged the question of the year from which the indexing should start.

"This is fundamentally a public policy question that will be discussed at length in Congress," Ms. Tanoue said.

Specifically asked about Merrill after her speech, Ms. Tanoue said she did not consider an increase in premiums to be punitive.

"The issue isn't to assess a punitive surcharge on those that are infusing new deposits into the system," she said. "It's really how to address the issue in a fair and equitable manner."

Most of the industry praised Ms. Tanoue's speech, which seemed to accomplish the nearly impossible task of pleasing all three major trade organizations, each of which has emphasized different priorities.

James Chessen, chief economist with the American Bankers Association, said the speech hit the so-called "free-rider" issue head on. "The issue of fast-growing institutions has risen to the top of many bankers' lists as the most important issue for reform. I think she is acknowledging it is one of the compelling reasons to make a change."

Diane Casey, president of America's Community Bankers, said Ms. Tanoue's rebate proposal was also a hit. "In recent times, rebates has been a verboten topic. The FDIC has now said yes, an adjustment should be made once the funds go over a certain ratio. I think she has hit a home run in at least putting the issues on the table - suggesting to the industry that the FDIC has listened to them."

Kenneth Guenther, executive vice president of the ICBA, said "the free rider concern" will probably drive the FDIC's legislation. "This is the time for all good bankers to come to the aid of the FDIC and lobby for these reforms, before the Bush administration makes decisions on this issue."

Alan Kline and Laura Thompson contributed to this report.

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