WASHINGTON - The House was expected to move quickly Tuesday night on legislation that would give thrifts more time to deduct from capital 15% of their investments in real estate development units.
Late Monday, the Senate approved a five-line measure giving an additional four months to comply with the provision from the 1989 thrift-bailout law.
Thrifts were required to deduct from regulatory capital 25% of their realty investment last year and another 15% today. More than 300 thrifts, including several of the largest in California, are affected.
The deductions would not directly affect earnings. But if they pushed a thrift out of compliance with capital rules, the institution might be forced to sell the real estate investment at a loss, hurting profits.
Banking Panel's Leaders
Rep. Henry B. Gonzalez, D-Tex., and Rep. Chalmers Wylie, R-Ohio, the House Banking Committee's chairman and ranking minority member, agreed to seek approval of the Senate bill, according to congressional sources.
With the panel's leaders in agreement, the House leadership could schedule a quick vote on the bill, which would go to the President's desk within days. Approval would have to be done by unanimous consent, according to committee aides.
The four-month extension would transfer the rule's impact to the fourth-quarter financial statements at most thrifts. However, publicly held institutions might have to disclose a change in capital positions on Nov.1 - the day the rule would take effect - if it is a "material event" under Securities and Exchange Commission rules, said Patrick Forte, president of the Association of Financial Services Holding Companies.
Some thrift officials hope another other reprieve will be obtained before Congress adjourns.