WASHINGTON -- Paying for part of the S & L cleanup could leave the new thrift insurance fund effectively broke, the nation's top savings and loan regulator said in a letter to Congress on Wednesday.

"Thrifts, like banks, can and_should be required to capitalize their own insurance fund without taxpayer assistance," wrote Jonathan L. Fiechter, acting director of the Office of Thrift Supervision, in letters to the House and Senate banking committee chairmen and minority leaders. "The current financing structure makes achieving that goal unlikely."

The new Savings Association Insurance Fund will pay for future S & L failures when the Resolution Trust Corp. stops taking failed thrifts. Thrifts now pay an average of 23 [cnts] per $100 of deposits to build up the thrift fund's reserves.

But in addition to paving for any thrifts that fail, the insurance fund must also pay $772 million annually in interest on Financing Corp., or FICO, bonds that pay part of the S & L cleanup tab.

"As it now stands, the SAIF/FICO funding structure will necessitate premium increases to extraordinary levels," Mr. Fiechter wrote. "Charging healthy and well-capitalized thrifts insurance premiums that are two to five times greater than what a comparable bank is charged will not provide a stable revenue floor for SAIF."

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