Magazine article American Banker

D'Amato Criticizes Banks for 'Cavalier Attitude' to Problems of Thrift Fund

Magazine article American Banker

D'Amato Criticizes Banks for 'Cavalier Attitude' to Problems of Thrift Fund

Article excerpt

WASHINGTON-Senate Banking Committee Chairman Alfonse M. D'Amato criticized bankers Tuesday for their "cavalier attitude" toward the problems of the Savings Association Insurance Fund.

"I believe we really have an obligation to deal with this and deal with it in a manner that will bring stability to the industry," Sen. D'Amato said.

If nothing is done to shore up the underfunded thrift insurance fund, he said, "it's going to be something lots of people are going to regret - even some of my friends who take a rather cavalier attitude on the other side of the equation in the banking industry.

"They might have a temporary advantage, but in terms of the entire industry it could bring grave harm."

Sen. D'Amato's remarks came during an oversight hearing on the Resolution Trust Corp., which on July 1 hands over responsibility for backing thrift depositors to the Federal Deposit Insurance Corp.'s savings association fund.

As of March 31, that fund contained about $2.2 billion - $4.3 billion less than required by law. "The failure of a single large thrift or a couple of medium-size thrifts could bankrupt the fund," FDIC Chairman Ricki Helfer said at Tuesday's meeting.

Ms. Helfer and other members of the Thrift Depositor Protection Oversight Board, which oversees the RTC, seconded Sen. D'Amato's urgings that something be done about the FDIC's Savings Association Insurance Fund and the looming disparity in premiums between it and the much-healthier Bank Insurance Fund. …

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