Magazine article American Banker

Amid Battling, S&L Bailout Bill Slips Through

Magazine article American Banker

Amid Battling, S&L Bailout Bill Slips Through

Article excerpt

WASHINGTON -- While the House Banking Committee's plan to fund the thrift bailout remains mired in controversy, the full House has quietly approved legislation to provide $2.7 billion or more for the cleanup effort.

An appropriations bill, which passed last week without a murmur of dissent, would authorize the Treasury Department to disburse "such sums as may be necessary" for the fledgling Savings Association Insurance Fund, or SAIF, under authority from the 1989 thrift bailout law. The money would be available after Oct. 1.

For budget purposes, the House Appropriations Committee estimated that the funding would amount to about $2.7 billion for fiscal 1994, which begins on Oct. 1. However, the 1989 bailout law appears to permit larger borrowings -- perhaps as much as $4 billion -- for the year.

Two-Step Process

The federal government provides money in a two-step process of authorization and appropriation. The 1989 law authorized up to $32 billion in two separate pools, subject to annual limits. How those limits are interpreted would determine how much money SAIF could receive if the House-passed appropriation is enacted into law.

The Senate has not yet taken up the appropriations bill.

Although the funding provided by the appropriation is less than the amount approved by the banking committee, it would come without any of the tough restrictions imposed by the banking panel. As a result, it could provide more money that would actually be available under the banking committee version. …

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