Savings League Chief Disputes GAO on FSLIC

No taxpayer bailout of the federal insurance program for troubled U.S. savings institutions should be needed for at least three years, a savings official said.

Theo Pitt, chairman of the U.S. League of Savings Institutions, said in a television interview Friday that he disagreed with a General Accounting Office report Thursday saying that the Federal Savings and Loan Insurance Corp.’s needs to cover savings failures would likely exceed revenues eventually. FSLIC insures savings accounts up to $100,000 each.

Both Pitt and Dan Wall, chairman of FSLIC’s parent Home Loan Bank Board, said on NBC’s “Today” program that there was no question that Congress was committed to a taxpayer bailout of FSLIC if that should become necessary.

But Pitt said some $20 billion to be paid by U.S. savings banks in special fees under a three-year program that began eight months ago should keep FSLIC solvent at least that long.