Bill Passed That May Let Ohio S&Ls; Reopen

Associated Press

The Senate early this morning unanimously approved compromise legislation that lawmakers said could open some of Ohio's 70 closed savings and loan associations later in the day.

Gov. Richard F. Celeste said he would sign the bill immediately.

Senators approved on a 32-0 vote the amended bill to require the thrifts to drop their private insurance and obtain federal deposit insurance. It had rejected a similar House-approved measure on a 16-16 tie early Tuesday morning.

But the House on Tuesday night approved, 92 to 0, an amended version that included provisions designed to soothe senators who feared that requiring federal insurance could put some of the S&Ls; out of business.

The new version was attached to a Senate bill, approved earlier in the day, which could allow depositors in the institutions to withdraw a portion of their savings.

Senators had said that, if the House passed the measure, it would be up to savings and loans to decide if they wanted to open today to allow the limited withdrawals.

The action came five days after Celeste ordered the institutions closed following a run by depositors triggered by the March 9 closing of Cincinnati-based Home State Savings Bank. Home State closed after it was revealed that it could lose millions in the failure of ESM Government Securities Inc. of Fort Lauderdale, Fla.

Factor in Dollar's Slide

Since then, one Cincinnati-area savings and loan had reopened after obtaining conditional approval for membership in the Federal Savings and Loan Deposit Corp.

The closings of the institutions was one factor in the biggest one-day slide of the dollar in 14 years on international trading markets Tuesday, analysts said. Gold prices qoared.

About 500,000 depositors at the closed thrift institutions remained cut off from their money.

Earlier Tuesday, Celeste, a Democrat, met in Washington with federal banking officials in an attempt to expedite applications for Ohio savings and loans seeking federal deposit insurance.

Celeste said Federal Home Loan Bank Board Chairman Edwin Gray promised "an unprecedented superhuman effort" to bring applying thrifts under federal coverage.

Included in this would be a waiver of the normal 10-day waiting period for public comment on applications, said Celeste, who also met with members of Ohio's congressional delegation.

An earlier bill approved by the House called for mandatory federal insurance for the thrifts, but was defeated 16-16 by the Senate early Tuesday.

'Playing Politics'

"I'm kind of shocked the way they're fooling around with it up there in Columbus," said Richard Dehler, a depositor at the closed Molitor Loan & Building Co. of Cincinnati. "With our checking account froze, too, I just think they ought get off their duffs and understand that people need their money and quit playing politics and get moving so banks can get going again."

In the House, where Democrats hold a 59-40 voting edge, the bill requiring federal insurance before the thrifts could reopen was approved 85 to 2 on Monday. The institutions had been insured by the private Ohio Deposit Guarantee Fund.

But the Republican-dominated Senate balked, offering instead a bill that would leave it to the state superintendent of savings and loans to set application and insurance requirements.

Meanwhile, frustrated depositors planned a car caravan from Dayton to the Statehouse.

"They're extremely interested in getting access to their money," said Fred Kaufmann of Dayton, one of the organizers of the protest scheduled for this morning. "And they want it all back; they don't want just some of it."

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World