Newspaper article THE JOURNAL RECORD

S&l Industry Bailout Provokes Wide Variety of Public Reaction

Newspaper article THE JOURNAL RECORD

S&l Industry Bailout Provokes Wide Variety of Public Reaction

Article excerpt

The costly federal bailout of the beleaguered thrift industry has provoked everything from anger to ambivalence from the American public, although many depositors say their confidence in the soundness of the nation's banking system remains virtually unshaken.

``Every individual who has money in a savings and loan has to be aware that (the government) insures the money ... and the comfort level that the savers should have is directly related to the comfort they have with the federal government,'' said Ronald Hyde, who keeps checking and savings accounts with thrifts in the Phoenix area.

Echoing the sentiments of a number of Americans, Hyde said he approved of the long-awaited thrift industry rescue plan that President Bush signed into law on Wednesday, but called the cost for carrying it out ``shocking at the very least.''

The landmark legislation will require the government to spend a whopping $285 billion over the next 30 years, more than half of that from taxpayers, to close or dispose of money-losing thrifts.

It is the most expensive industry rescue in history and some experts say it will cost each American taxpayer at least $1,500.

A spot check by The of depositors in cities nationwide suggested widespread resentment that taxpayers must pay for the industry's problems. Most of the thrifts' problems can be traced to the early 1980s when the industry was deregulated, permitting S&Ls to enter a broad array of new, riskier businesses.

``I think it stinks,'' said Ramiro Salazar, a 55-year-old mail carrier from the Los Angeles area. ``How could they let it (the thrift problem) get so out of hand?''

``This should not have happened,'' said John McGirk, a computer technician in New York. ``The regulators knew this was coming and they should have done something about it before making us pay for it.''

But Simone Hyams, of Tucson, said that ``maybe by helping the S&Ls get back on their feet, that will help the economy. …

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