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The authors briefly discuss the legislative process that led to the new banking law, address the law's merger of the deposit insurance funds and its resolution of the problems of the Savings Association Insurance Fund, discuss the most important provisions of the law that generally affect, respectively, United States bank holding companies, national and state banks, and thrifts, and analyze the most significant changes in the consumer credit laws, particularly under the Fair Credit Reporting Act.

Critics question the viability of the Savings Assn. Insurance Fund (SAIF) and the thrift's industry's ability to capitalize it. Three policy options for capitalizing SAIF are being evaluated, namely to adopt a wait and see attitude and handle future problems when they become imminent, merge the SAIF into the Bank Insurance Fund and capitalize the SAIF. Policymakers are advised to consider the role of specially chartered housing finance lenders before casting their decisions., The ability of the thrift industry to capitalize the Savings Association Insurance Fund (SAIF) is becoming increasingly uncertain. By the end of the year, SAIF-insured thrifts may face deposit insurance [...]

The Bank Insurance Fund grew more slowly in the third quarter than in the second, and so did the Savings Association Insurance Fund. The bank fund grew by $240 million, [...]

Citigroup Inc. has revived the ghost of insurance premiums by announcing that Salomon Smith Barney is shifting billions of dollars into insured accounts and by saying Friday that it would [...]

By BARANCIK, SCOTT The days of free deposit insurance may be dwindling for thrifts. On Jan. 1 the Federal Deposit Insurance Corp. must move roughly 10%, or $1 billion, from [...]

Savings and loan association (S&L) executives are petitioning Congress to slow the process of financial reform and asking it to simply merge the deposit insurance funds in 1997. These executives are worried that Congress' promise to bankers to create a new savings and loan association charter in exchange for their help in bailing out the Savings Association Insurance Fund will diminish the fiduciary powers of S&Ls., Fearing financial reform will dilute their charter, thrift executives are asking Congress to slow down and simply merge the deposit insurance funds this year. However, that would require lawmakers to [...]

A lending slowdown, higher provisions for credit card losses, and one time charges for deposit insurance drove down third-quarter earnings at First Bank System Inc. and Barnett Banks Inc. Each [...]

Banks and savings and loan associations (S&L) are required to report the assessments levied by the federal government to refinance the Savings Association Insurance Fund (SAIF) as expenses on their 3rd qtr, 1996 financial reports. Forecasts of financial institutions' earnings-per-share before the charge predicted an 8.8% increase for leading money-center banks and a 6.3% increase for regional banks, while S&Ls' operating income was predicted to increase by 18.2%. However, the SAIF charge will cut into actual reported earnings., Many third-quarter earnings reports released by banks and thrifts over the next few weeks will include glaring charges that in some cases could exceed operating profits. The charges are related [...]

President Clinton signed the law that assures financing of the Savings Association Insurance Fund and payment on the Financing Corp bonds. The House of Representatives passed a spending bill that includes a capitalization plan for the thrift fund. The new law also includes regulatory relief provisions for thrifts, bank merger rules, a ban on credit unions backed by government-sponsored entities and restrictions on banks' insurance business., An 18-month battle to shore up the Savings Association Insurance Fund yielded just one victor: the Clinton administration. Sure, the thrift industry is getting a solid fund and some help [...]

Congress is expected to pass legislation to capitalize the Savings Assn Insurance Fund. The terms of the thrift fund rescue are considered to be resolved and include a $4.7 billion one-time fee to raise capital for the insurance fund. The American Council of Life Insurers is lobbying to prevent banks from acquiring the power to market insurance products. The Independent Bankers Assn of America is lobbying against government-sponsored enterprises from being allowed to charter credit unions., Legislation to bail out the Savings Association Insurance Fund is finally primed for passage. Approval is expected before Congress adjourns - as early as Friday or as late as the [...]

MAF Bancorp Inc and First Financial Corp have both obtained permission from the Federal Deposit Insurance Corp to become banks instead of thrifts, but only First Financial will press ahead immediately with its restructuring plans. MAF Bancorp and its Mid America Federal Savings unit are going to wait to see if Congress passes legislation that will bail out the Savings Assn Insurance Fund. If that happens, then the prime reason for the thrifts' conversion to bank status, a reduction in deposit insurance premiums, would be eliminated., Armed with new bank charters, two thrift companies are laying divergent battle plans. MAF Bancorp, Clarendon Hills, Ill., and First Financial Corp., Stevens Point, Wis., won regulatory approval in late [...]

Independent Insurance Agents of America VP-Federal Affairs Robert Rusbuldt says that the IIAA will lead a fight against the extension of bank insurance powers through the vehicle of the Savings Association Insurance Fund (SAIF) refinancing bill. The SAIF is expected to go bankrupt in 1997, and Congress wants to merge it with the Bank Insurance Fund. Rusbuldt says the insurance industry supports the SAIF bailout but opposes the banking industry's attempt to gain regulatory relief and new federal insurance powers by attaching unneeded legislation to the SAIF bailout bill., WASHINGTON - The bank Insurance battle will erupt once again when Congress returns from its August recess with insurance groups seeking to prevent any expansion of bank powers unless some [...]

The House Banking Committee has scheduled a vote on a Savings Association Insurance Fund (SAIF) bailout plan that would impose a one-time levy on savings and loan associations to capitalize the SAIF. The plan also imposes a levy on banks to pay the interest on the Financing Corp. bonds that also will be used to finance the SAIF as banking deposit insurance funds would be merged with the SAIF in 1999. The bill to be voted on does not put a levy on Fannie Mae or Freddie Mac and spreads out banks' payments over time., The House Banking Committee is expected to vote today on a new, bipartisan plan for rescuing the thrift insurance fund. The legislation would leave banks with a big share of [...]

Commercial banks and taxpayers are being asked to maintain the solvency of Financing Corporation bonds and the Savings Assn Insurance Fund. Bankers have informed the American Bankers Assn that they rebuilt the Bank Insurance Fund without taxpayer funds and now are being required to rescue the competition. The bankers are also angry that this issue is being tackled when Congress can plan the future of the thrift charter and insurance fund without outside financial assistance., To the Editor: You recently covered Treasury Under Secretary John Hawke's criticism of short-term proposals to address potential problems of the Savings Association Insurance Fund and Financing Corporation bonds. Apparently, [...]

The resignation of Senate Majority Leader Bob Dole from that body will have a negative impact on linking the gas tax repeal and the Savings Association Insurance Fund bailout. Dole was a leading advocate of both measures and is using them in his presidential campaign. Linkage of the two issues in the House is also uncertain, although recapitalization of the Savings Insurance Fund is in budget plans there as well as in the Senate., Majority Leader Bob Dole's surprise announcement Wednesday that he is relinquishing his Senate seat is a major blow to efforts to pass the thrift insurance fund rescue as part of [...]

Senate Majority Leader Bob Dole has affixed a rider to his legislative proposal to repeal the gas tax that would provide for coverage of the debt incurred by the savings and loan insurance fund during the 1980s. Banks are opposed to the proposal which would make them assume $600 million annually in payments on bonds used to rescue the thrift industry until 2017. Democrats might attempt to filibuster the proposal unless Republicans agree to a separate vote on raising the minimum wage., Senate Majority Leader Bob Dole has revived plans to tie the thrift insurance fund rescue to legislation repealing the gasoline tax and has scheduled a vote for Tuesday. Although President [...]

The House Rules Committee dashed hopes for a rescue of the Savings Association Insurance Fund by declining to attach a rescue bill to a short-term budget bill. Committee members Deborah Pryce and Martin Frost objected to the thrift fund bill and convinced other members to detach it from the budget measure. A rescue measure could still pass, however, as part of a 1997 budget bill., The Savings Association Insurance Fund rescue was stripped from a short-term funding bill Tuesday and has faint hopes of passing today when Congress votes on a broader budget measure. The [...]

Members of the House Banking Committee oppose committee Chmn Jim Leach's proposal to use thrift deposit premiums to be used for paying on Financing Corp bonds. Rep Marge Roukema has proposed combining the thrift and commercial bank charters. Other legislators say capitalizing the Savings Association Insurance Fund is a top banking issue., House Banking Committee members joined regulators Tuesday in opposing a short-term fix for the Savings Association Insurance Fund. 'I am deeply committed to resolving this issue once and for all [...]

House Banking Committee Chmn Rep Jim Leach said that Congress is not likely to bail out the Savings Association Insurance Fund (SAIF) in 1996. Industry experts anticipate thrifts to move more of their deposits to the Bank Insurance Fund. One legislative proposal would raise $5 bil for paying interest on Fico bonds through a one-time fee on thrift deposits., Congress will not rescue the thrift insurance fund this year, House Banking Committee Chairman Jim Leach predicted Tuesday, prompting alarmed industry officials to forecast an exodus from the Savings Association [...]

Golden West Financial Corp, of Oakland, CA, is one of several savings and loans leaving the Savings Association Insurance Fund (SAIF) of the FDIC. SAIF-insured deposits at World Savings and Loan, Golden West's S&L subsidiary, have decreased $600 million from $19.8 billion from Mar 31 to Sep 30, 1995. BAIF-insured deposits at World Savings Bank, another Golden West subsidiary, have increased to $865 million at the same time., A predicted exodus from the Savings Association Insurance Fund has begun, with California's Golden West Financial Corp. leading the way. Federal Deposit Insurance Corp. Chairman Ricki Helfer said Friday that [...]

Premiums for the Savings Association Insurance Fund (SAIF) will remain higher than bank insurance premiums unless Congress resolves differences with the Clinton administration over budget reconciliation legislation. A rescue plan for the SAIF is tied to the budget bill passed by Congress that President Clinton has threatened to veto. A continued stalemate over the budget would severely impact thrifts that are undercut by banks on insurance premium rates., If politicians can't strike a deal on the budget by Jan. 1, thrifts will begin the year paying substantially higher insurance premiums than banks - exactly what the industry has [...]

The thrift industry will owe at least $600 million less than expected for the rescue of the Savings Association Insurance Fund, according to government statistics. Third-quarter figures show the thrift [...]

House Banking Committee chairman Jim Leach has proposed to transfer a $16 billion obligation from banks and thrifts to the Federal Home Loan Mortgage Corp (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) to finance the Savings Association Insurance Fund. The obligations were issued in 1987 to save the thrift insurance fund. Banking industry lobbyists supported Leach's proposal but noted that the legislation will encounter strong political opposition from Freddie Mac and Fannie Mae., Seeking support for his Glass-Steagall repeal bill, Rep. Jim Leach proposed lifting a $16 billion obligation from banks and thrifts and placing it on the shoulders of Fannie Mae and [...]

The pace of thrift purchases by banks has slowed sharply in 1995 due to uncertainty over potential costs that thrift deposit holders must pay to recapitalize the Savings Association Insurance Fund. Until Congress concludes debate on the insurance premium issue, banks will be reluctant to purchase thrifts for fear of overpaying. One industry consultant explained that the one-time premium payment faced by banks with thrift deposits is hard to quantify., Congressional debate over the thrift insurance fund appears to be reducing commercial banks' appetite to buy thrifts. As Congress debates the future of the thrift charter and what holders of [...]

John D. Hanvke Jr., undersecretary of the Treasury for domestic finance, told members of the Senate Banking, Housing and Urban Affairs Committee that the failure of one or two large [...]

A plan that would merge the banking and thrift industries was announced by House Banking Committee Chairman Jim Leach that would fund a rescue of the Savings Association Insurance Fund but would not extend new powers to banks. Bankers were hoping that special powers of the thrift industry would be added to their charter. Leach's plan would protect existing mutually owned thrifts and allow existing unitary thrift holding companies to continue., WASHINGTON - House Banking Committee Chairman Jim Leach announced plans Wednesday to infuse money into the undercapitalized thrift insurance fund, but dashed bank industry hopes for new powers. In a [...]

Eleven banks are jointly asking the Federal Deposit Insurance Corp to measure thrift deposits differently. Under a government plan to replenish the Savings Assn Insurance Fund, banks that hold deposits purchased from thrifts would be required to pay at least $.0085 for each $100 of those deposits. The changes proposed by the banks, if accepted, could save them about $165 million., Eleven banks have joined forces to ask the Federal Deposit Insurance Corp. to change the way it measures thrift deposits. The request is significant because if the FDIC agreed, the [...]

Congress likely will pass a bill to fund the Savings Association Insurance Fund with a one-time surcharge on savings and loan deposits. Since commercial banks own $159 billion in thrift deposits, they will wind up paying 23% of the total amount raised by the surcharge. The surcharge is expected to raise $6.1 billion, which will be collected on Jan 1, 1996. Commercial banks would be liable for $1.35 billion if the surcharge is set at a rate of 85 basis points. The surcharge may go as high as 90 basis points., Commercial banks will pay 23% of the $6.1 billion cost of rebuilding the thrift industry's insurance fund if the government's plan is adopted by Congress. Why? Because 771 banks own [...]

The banking industry is supporting a Congressional proposal to rescue the Savings Association Insurance Fund (SAIF) that would force thrifts to recapture 'bad-debt reserve' tax breaks. The loss of tax deductions would cost the thrift industry an additional $2 billion which it says it cannot afford. Thrifts support a Clinton administration proposal that requires funding through a one-time deposit fee but oppose any plan that mandates repayment of tax breaks., Legislation to rescue the Savings Association Insurance Fund may require thrifts to repay past tax breaks, adding at least $2 billion to the industry's cleanup tab. If Congress does decide [...]

Senate Banking Committee Chairman Alfonse M. D'Amato told bankers that he supports a rescue plan for the Savings Association Insurance Fund (SAIF) that will require banks to pay a portion of the costs. The $6 billion plan would require banks to pay 75% of interest due on Financing Corp bonds issued for the 1987 savings and loan rescue. The plan would also merge bank and thrift insurance funds and require thrifts to capitalize the SAIF with a one-time fee., Sen. Alfonse M. D'Amato made clear Friday that he supports a $6 billion rescue for the Savings Association Insurance Fund - and he bluntly told bankers they must pay part [...]

The Treasury Department and the Federal Deposit Insurance Corp are expected to propose a financial solution to solve the Savings Association Insurance Fund's fiscal problems before moving ahead with other issues. The government proposal would require banks to pay a portion of interest on Financing Corp bonds and force thrifts to pay 85 cents per $100 of deposits to raise capital for the fund. The American Bankers Association and Independent Bankers Association of America plan to oppose the government's plan., Government officials are expected to propose on Friday a narrow financial cure for the thrift insurance fund's ills. The government will address other issues, such as melding the thrift and [...]

Rising stock prices for thrifts may make it more difficult for the industry to convince Congress to provide financial assistance for the Savings Association Insurance Fund. The thrift industry argues that it needs help to capitalize the $15 billion necessary to fix the insurance fund. Nearly 45% of the fund's annual revenues are used to make interest payments on bonds floated to finance the savings and loan cleanup begun in 1987. The perception of a prosperous thrift industry may make Congress less willing to provide financial assistance., In the thrift industry, even the good news is bad. The American Banker thrift index is up 28% this year, with investors betting that falling interest rates will fuel robust [...]

House Republican Bill McCollum plans to introduce legislation that would force banks to contribute to the ailing Savings Association Insurance Fund but would offer them rebates as an incentive. McCollum's proposed legislation would require banks to contribute until both the bank and thrift insurance funds are fully capitalized. The Federal Deposit Insurance Corp would be authorized to rebate to banks any premiums accumulated in the bank insurance fund above its required reserve ratio of 1.25%., Rep. Bill McCollum, a rising star in the new Republican Congress, is trying to broker a compromise to cure the ailing thrift industry fund. The Florida Republican's deal would force [...]

Bank regulatory agencies and legislators agree that some solution must be found to rescue the Savings Association Insurance Fund (SAIF) from undercapitalization. The results of a House Banking subcommittee hearing indicate that the banking industry is likely to be called upon to help bail out SAIF because banks own 38% of SAIF's insured deposits. The thrift fund currently has $6.7 billion less than its goal of 1.25%, and thrifts are paying premium rates that are six times those that banks must pay., Lawmakers and government regulators agreed Wednesday at the first congressional hearing on the topic that the thrift insurance fund needs another bailout. The only question is where to get the [...]

Representatives of the American Bankers Assn (ABA) urged the Federal Deposit Insurance Corp (FDIC) to avoid passing the burden of the underfunded Savings Assn Insurance Fund to banks. The FDIC held hearings to get suggestions on how to deal with the rate differences between banks and thrifts for deposit insurance. Banks complain that thrifts are being allowed to charter banks and then switching the insurance burden. Several suggestions were made, including using the Resolution Trust Corp surplus to make the $6.7 billion shortfall., The American Bankers Association rallied its troops Friday to fight off pleas for help in recapitalizing the Savings Association Insurance Fund. 'There is no near-term, imminent problem,' argued Illinois banker [...]

A memo sent by House Banking Committee Chmn Henry B. Gonzalez to the committee's members proposed six ways to prop up the troubled Savings Assn Insurance Fund (SAIF). Proposals in the memo included merging the SAIF with the Bank Insurance Fund, transforming savings and loan associations (S&Ls) into banks and eliminating the chartering of new S&Ls, and redistributing Resolution Trust Corp monies to SAIF. Gonzalez believes that a new S&L financial debacle will occur unless SAIF's finances are shored up., WASHINGTON -- House Banking Committee Chairman Henry B. Gonzalez has outlined six ways to rescue the Savings Association Insurance Fund -- including a merger with the Bank Insurance Fund. In [...]

The Congressional Budget Office warned the House Banking Committee on Oct 14, 1994, that the Savings Association Insurance Fund might default on its bonds. The Federal Deposit Insurance Corp (FDIC) is limiting the amount of money it is giving the savings association fund to pay interest on the bonds. The FDIC does not permit premium income derived from thrifts owned by banks, whose numbers are increasing, to go toward paying interest on the bonds. Meanwhile, thrift industry leaders are lobbying for the merger of the FDIC and the Savings Association Insurance Fund., WASHINGTON -- The Congressional Budget Office is warning that the Savings Association Insurance Fund may default on the bonds issued to pay for the thrift industry's cleanup. In a memo [...]

The Savings Association Insurance Fund (SAID) Industry Advisory Committee has proposed that the fund be merged with the Bank Insurance Fund. Otherwise, the SAID will remain inadequately financed. Under the current system, a rate disparity is expected to appear in 1996 when the bank fund reaches congressionally mandated levels of $1.25 for every $100 in deposit, allowing banks to pay about five cents less per $100 in premiums than their current level of 24 cents. However, thrifts will still pay 24 cents per every $100, and the disparity may force them to reduce both loan and deposit activity., WASHINGTON -- A private-sector advisory group has concluded that a merger of the deposit insurance funds is the only way to rebuild the Savings Association Insurance Fund without taxpayer dollars. [...]

New York Rep Floyd Flake has expressed support for funding the Resolution Trust Corp and the Savings Assn Insurance Fund at levels that will serve the interests of savings institutions. Flake is also introducing the Bank Enterprise Act of 1993, which aims to reform the Community Reinvestment Act. This legislation is expected to protect savings institutions with outstanding CRA rating from protests as well as provide incentives such as deposit insurance premium reductions., To cheers from Savings & Community Bankers of America's annual convention audience, Rep. Floyd Flake, D-N.Y., pledged support for funding the Resolution Trust Corp. and the Savings Association Insurance Fund [...]

The House of Representatives has voted 214 to 208 to authorize $18.3 billion to continue funding the Resolution Trust Corp and the Savings Association Insurance Fund, two government agencies that are facilitating the bailout of failed thrifts. The Senate has also approved $18.3 billion for the bailout but would apportion the funds differently. For example, the Senate had approved $16 billion to fund the Savings Association Insurance Fund, while the House had limited funding to $8 billion. Representatives from the House and the Senate will meet to formulate a compromise on the legislation., WASHINGTON -- The House approved new funding for failed savings and loans by a six-vote margin, 214 to 208, setting the stage for enactment of the money bill before the [...]