Newspaper article THE JOURNAL RECORD

HOUSE PASSES BILL FOR INTERSTATE SALES OF S&Ls

Newspaper article THE JOURNAL RECORD

HOUSE PASSES BILL FOR INTERSTATE SALES OF S&Ls

Article excerpt

The Oklahoma House of Representatives Tuesday voted 86-10 to pass a bill permitting the immediate interstate sale of faile d and failing savings and loan associations.

There was no debate.

A Senate vote is expected early next week on House Bill 2060, co-authored by Rep. Benny Vanatta, D-Sapulpa, and Senate President Pro Tempore Rodger Randle, D-Tulsa.

Gov. George Nigh has promised to sign the bill.

Oklahoma Banking Commissioner Robert Y. Empie was enthusiastic, when he learned the House had approved the interstate "S&L" bill:

"Oklahoma needs all the help it can get, at this point in time."

The Oklahoma Banking Department regulates state-chartered savings and loan associations.

Growing concern over financially troubled savings and loan associations in Oklahoma - including five with negative net worths - is the reason why the Oklahoma League of Savings Institutions has lobbied hard for the bill.

Empie, the banking commissioner, said the savings and loan industry nationwide had some severe problems stemming from deregulation and inadequate accounting practices of the Federal Home Loan Bank Board.

"They have engaged in a lot of "ricky-ticky' accounting," Empie said of the Federal Home Loan Bank Board, the Washington, D.C.-based group that regulates federally chartered savings and loan associations.

"They've booked a lot of things that aren't acceptable, under generally acceptable acocunting practices," Empie said. "They've just been desperate to seize avenues to cover up their problem."

A spokesman for the Federal Home Loan Bank Board could not be reached Tuesday for a response to Empie's comments.

The Federal Home Loan Bank Board is in the process of hiring 1,000 bank examiners in an attempt to correct the problems of troubled savings and loan associations, Empie said.

"They are in the process of facing up to their situation," Empie said. "When that occurs, a lot of savings and loan associations will show up broke that don't appear to be broke now."

In Oklahoma, the hope is that legislation will be in place to permit interstate acquisitions of savings and loan associations before they fail, according to Michael Toalson, executive vice president of the Oklahoma League of Savings Institutions.

When deregulation began in the late 1970s, a lot of savings and loan associations scrambled to grow too fast, Empie said.

"They received a lot of new powers and quite a number of them just went off the deep end and literally broke themselves," Empie said. …

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