With the federal government poised to drop deposit insurance premiums to zero for most of the nation's banks on Jan. 1, thrift executives are worried they'll be unable to vie for customers if the banks use the windfall to raise deposit interest rates.

"I'm nervous about it. I'd be lying to you if I said I wasn't," said C. William Landefeld, president and chief executive of Citizens Savings Bank, Normal, Ill., and the first vice chairman of America's Community Bankers, a thrift trade group. "I would rather be sitting in their shoes right now than in my shoes."

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