Incoming Calif. Leader Cites Worries over Savings Fund
Q&A The California League of Savings Institutions searched for months for a president to replace Jay Janis, who died in October.
Late last month, the league selected Louis H. Nevins, managing partner in the Washington office of Thacher, Profitt & Wood, a law firm that represents
financial services clients.
Mr. Nevins will start his new job later this month. He recently shared his views with American Banker reporter Robyn Meredith Berry.
American Banker: What key issues concern the league's membership?
Louis Nevins: I don't think there's any question that the key issue today is their competitive equality. There is very, very serious concern about the lack of funding possible for the SAIF [Savings Association Insurance Fund].
There is a tremendous fear that in the not-too-distant future, there will be widely divergent insurance assessments.
If you have S&Ls paying double or triple the deposit premiums of commercial banks, they're either going to have to take it away from their customers -- which means the deposits are going to go to commercial banks and they're going to have a much, much tougher time attracting deposits -- or they absorb those increased costs. In that case their return on capital is lower, hence they can't accumulate capital and they can't attract capital.
It's just a situation that cannot be permitted to stand. That's the No. 1 issue.
AB: What else do California thrifts want from Washington?
LN: There's a lot of concern about the degree of [regulatory] paperwork. I think they would like to have something of an easing of their paperwork burden.
Today, the industry is just asking for a fair shake. It feels as though it has come pretty close to paying its debt and would like to regain its place among the law-abiding businesses of the community.
AB: How can it do that?
LN: I think that you'll agree that there's a major job ahead of us in attempting to demonstrate to the policy makers that this is an industry that recognizes its social responsibilities.
AB: What do they fear from Washington?
LN: I think they fear most that SAIF will not be adequately funded.
AB: What is the best thing that the Clinton administration could do to help California thrifts?
LN: The President keeps talking about jobs. If somehow he could press a button and magically restore the California economy to its frmer robust state and have the state employment at 110%, that would be very, very helpful.
We haven't talked about the California economy and declining real estate values -- it's obviously very serious and the state does rank near the top in terms of economic dislocation and depressed real estate values, and those conditions have not stabilized yet.