WASHINGTON - The government is preparing a $12 billion plan to shore up the Savings Association Insurance Fund - and commercial banks would pay more than half the tab.

The plan, circulating Friday, calls for three steps that officials have been mulling for months: Banks would pay most of the annual interest on bonds sold in 1987 to start the thrift cleanup; savings institutions would pay a one-time fee to rebuild the thrift fund; and the life of the Resolution Trust Corp. would be extended to cover future thrift losses.

According to thrift and banking industry sources, 2.5 cents of the new 4-cent bank deposit insurance premium would be diverted to cover annual interest payments on the thrift cleanup bonds, known as Financing Corp., or Fico, bonds.

The Federal Deposit Insurance Corp. has proposed slashing bank rates to 4 cents from 23 cents per $100 of domestic deposits by the third quarter. The industry, however, has argued that the premium should be zero in the second half.

Right now the thrift industry, through premiums paid to its insurance fund, is responsible for the Fico bonds. The government's plan would shift to banks 77% of the annual tab, which extends through 2019. The industry's yearly cost would be $600 million; the total present-value cost would be $6.5 billion.

Tucking the Fico payment into the 4-cent premium, rather than on top of it, is designed to blunt the opposition of banks. But banking industry representatives weren't biting Friday.

"We would oppose, with everything we have, any proposal that has us paying for part of Fico," said Edward L. Yingling, the American Bankers Association's executive director of government relations. "There is no justification for the 4 cents in the first place."

Former FDIC chairman L. William Seidman called the plan "a huge loss for the banks," and scolded the industry for not working harder to avert this outcome.

"The banks have not been up there lobbying at all," he said. "By not stepping up and asking for the money that was taken out SAIF, they are going to take a hit to profits."

Details in this rescue plan - being stitched together by the FDIC, the Treasury Department, and the Office of Thrift Supervision - could still change.

Officials from these agencies met Friday afternoon with staffers from the Senate Banking and Budget committees to put the final touches on the legislation.

Sources on Friday said the plan may be included in the fiscal year 1996 budget resolution, which is expected to be released Tuesday by the Budget Committee chairman, Sen. Pete Domenici, R-N.M.

If the plan is included in the budget bill, lobbyists said Friday, it will be difficult to stop.

"This is a very, very clever legislative ploy," said one lobbyist who requested anonymity. "It's better than stand-alone legislation, which is easier to kill."

The second piece of the government's plan would force thrifts to pony up a large one-time fee to rebuild the undercapitalized thrift insurance fund. The numbers being floated Friday ranged from 78 cents to 84 cents, or $5.46 billion to $5.88 billion when levied against the thrift industry's $700 billion of deposits.

To encourage support, the government is considering allowing thrifts to write the expense off over three years, which would dull its impact on profits.

But thrift lobbyists said Friday that a crucial ingredient of any solution is still missing: a merger of the bank and thrift insurance funds.

"Anything that entails an up-front payment of this magnitude should include an immediate merger of the funds," said Lou Nevins, president of the Western League of Financial Institutions. "We just don't think a separate SAIF fund is stable."

Paul Schosberg, president of America's Community Bankers, agreed that "the case for doing this once and doing it right cries out" for a merger.

"If both funds are capitalized, where's the argument" against combining the funds, he asked.

The up-front fee would decrease capital levels, which could expose some thrifts to sanctions under Prompt Corrective Action rules such as growth restrictions or limits on dividend payments.

The final piece of the government's solution would keep the RTC running for five more years to handle future thrift losses. The agency is slated to transfer responsibility for thrift failures to the Savings Association Insurance Fund on July 1.

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