Bush’s Plan to Help S&Ls; Inadequate, Nader Warns

President Bush’s plan to bail out ailing savings and loans does not provide enough money or reforms to rescue the thrift industry, consumer advocate Ralph Nader said today.

At a news conference to disclose his proposals for fixing the S&L; crisis, Nader said he was glad that Bush, in outlining the Administration’s proposed solution last week, has recognized a $100-billion problem exists.

But Nader said that the Bush plan sharply underestimates the amount of money needed to bail out the insolvent thrifts and that taxpayers will be forced in future years to make up the difference.

“It does not follow that the Bush government has to place the burden of the FSLIC (Federal Savings and Loan Insurance Corp.) bailout on the backs of those taxpayers who are the least able to pay,” Nader said.

“Instead, the burden . . . should fall primarily on those most able to pay or engaged in financial activities providing only limited or arguable productive benefit to society,” he added.

The Bush plan includes $40 billion in taxpayers’ money, $50 billion in bonds to be repaid by the thrift industry, a federal takeover of about 300 insolvent institutions and new regulatory oversight by the Treasury Department and the Federal Deposit Insurance Corp., which previously insured commercial banks but not thrifts.

More than 500 of the nation’s 3,100 thrifts are now broke or near to insolvency. The Federal Savings and Loan Insurance Corp., which insures deposits up to $100,000 in thrifts, cannot deal with the problem because it, too, is technically insolvent.

The Bush plan inadequately addresses the problem of bank managers using depositors’ money to make risky or bad loans or, as happened so often in recent years, engaging in fraud, Nader said.