Magazine article American Banker

More Regulations, Tighter Supervision of Thrifts Crucial, US League Chief Says

Magazine article American Banker

More Regulations, Tighter Supervision of Thrifts Crucial, US League Chief Says

Article excerpt

CHICAGO -- More regulation and stricter supervision are vital if the thrift industry is to survive its current problems, according to Gerald J. Levy, the new chairman of the U.S. League of Savings Institutions trade group.

Examinations of thrifts should be tightened, and the enforcement powers of the Federal Home Loan Bank Board strengthened, he told the Chicagoland Association of Savings Institutions in his first public speaking engagement.

But he is not calling for reregulation of the whole industry, he stressed. Rather, the renegade thrifts that continue to defy authority must be reined in before they increase the burden on the already-strapped Federal Savings and Loan Insurance Corp.'s deposit insurance fund, he said.

"We don't want regulations and policies that burden the majority for the sins of the few, while, in fact, a few institutions continue to operate irresponsibly and multiply. We'd like to take a rifle approach and deal forcibly with them," he said. "We must encourage the supervisors and examiners to act quickly and deal forcefully with the institutions that continue to violate the principles of safe and sound practices."

The aim is to make sure the industry has contained its current problems before it looks at ways of fixing what's already wrong. "We must put the cork back in the bottle," he said.

Meanwhile, a U.S. League task force charged with finding ways to bolster the FSLIC met for the first time last week and made a lot more progress than Mr. …

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