Thrift Trade Group in Survival Mode

Q&A Gone are the days when a one-year stint as the chairman of a banking trade group was the industry's equivalent of being crowned Miss America. With a banking reform bill moving through Congress, the trade group figureheads have become fighters, storming the Hill to lobby for new powers and guarding the ones they now have.

Raymond V. O'Brien Jr., who became the chairman of the National Council of Savings Institutions on May 7, has a particularly tough assignment. Big losses in his savings bank industry have fueled efforts to emasculate the charter. Closings have reduced the trade group's membership from about 500 in the 1980s to 300 today. Mr. O'Brien, 63, who is also chairman of New York City's Emigrant Savings Bank, discussed his role with Washington bureau chief Jim McTague.

American Banker: Why do you want to head a trade group? Raymond O'Brien: I'm near retirement and we have ample top management to fill in here. We're in a transition stage. The National Council came to me last summer when the savings bank of the man next in line to be chairman was sold. They asked me to fill in for him. AB: What issue is at the top of your agenda?

RO: The bank bill unanimously voted out of subcommittee last month has something in it for everybody but savings banks. If this version of the bill goes through, state-chartered savings banks would lose some special powers. ... We are concerned about losing our ability to invest in equity securities.

AB: Have the equity investments been successful?

RO: Yes. But Bill Seidman, the chairman of the Federal Deposit Insurance Corp., seems to be opposed to us. Tim Ryan, director of the Office of Thrift Supervision, is the real hard charger on the issue. When I asked him at a meeting if he had statistics showing damage being done to savings banks from their equity investments, he looked me straight up and said "no." He claimed it's an inappropriate power for a bank.

AB: You obviously disagree. RO: I think there's a bias against state powers in Washington, D.C., arising from the S&L crisis. The easiest thing for legislators is to make every charter absolutely plain vanilla and eliminate all risk. The problem is, it's difficult for banks to attract capital if investors no longer can get a good return.

AB: Why is your trade group talking to the U.S. League of Savings Institutions, the S&L trade group, about a merger? RO: We're both losing members. And a decade from now, there may be a single bank charter, so there won't be any difference.

AB: Are you in favor? RO: I am open. We think we have a lot more credibility than they do on Capitol Hill.

AB: Previous attempts failed. RO: It would be a hard sell to our members. There's strong resistance in some of the New England states and in New York.

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