Small S&Ls; Hit Plan to Hike Levy by 400%

Representatives of California’s small savings and loan associations have begun a campaign to lobby state authorities for a cutback in the proposed fivefold increase in the basic annual levy on state-chartered S&Ls.;

Two of the California League of Savings Institutions’ small S&L; groups agreed Monday to ask the trade association to press the state’s Department of Savings and Loan to trim its proposed $25,000 basic levy to $20,000. Even if the recommended reduction is adopted, the new basic assessment still would be four times the current $5,000 annual levy for associations with $100 million or less in assets.

The League’s Smaller Assns. Committee met Monday and agreed that, while an increase in the assessment is needed to enable the department to maintain its operations, it shouldn’t be as steep as proposed, said Kirk Hallahan, a Cal League senior vice president. The assessments are the sole source of the state regulatory agency’s annual budget.

The committee also recommended development of a system to bill S&Ls; directly for state-conducted audit examinations and loan portfolio appraisals. Under such a system, the overall basic assessment could be lowered even more, the committee argued.

Those recommendations were endorsed Monday by a special Legislation and Regulation Committee task force, which added its own call for the industry and the department to figure out ways to increase the caliber of the state agency’s staff, Hallahan said. The league’s board of directors will consider the recommendations and respond to the commissioner’s proposal before the period for comments ends Dec. 16, Hallahan said.

Neither committee sought changes in the assessment proposal affecting institutions with more than $100 million in assets.

Executives at the smaller S&Ls; have complained that the proposed 400% increase in the assessment for associations with assets of less than $100 million is unfair because the increase in the levy for the state’s largest and most powerful institutions would be much less. The proportionately heavier burden on the small S&Ls; impairs their earnings and hinders their growth, the executives argue.

The S&L; department regulates the 153 state-chartered thrifts.