BANKING/FINANCE

Of all the issues the independent bankers raised at their convention last week in connection with President Bush’s plan to rescue the ailing S&L; industry, none seemed to make bankers more irate than the one involving the banks’ symbol of strength and confidence: “Member FDIC.”

Bankers have long viewed the strength of the Federal Deposit Insurance Corp., which insures deposits up to $100,000 per account, as an aid in attracting deposits at a low interest rate. Depositors will accept low rates on savings and interest checking accounts if they feel confident that the bank and the industry are strong, bankers say.

S&Ls; pay more for deposits, they argue, largely because the Federal Savings and Loan Insurance Corp. is so weak it needs to be bailed out, and consumers want higher rates if they have to worry about the health of an S&L; or the thrift industry in general.

Under Bush’s plan, the FDIC would manage the FSLIC, and the logos that banks and S&Ls; use would change. Banks would use FDIC BIF, for Bank Insurance Fund, and S&Ls; would use FDIC SAIF, for Savings Assn. Insurance Fund.

“Why change the bank logo? We’ve established it and we deserve to use it,” said Charles T. Doyle, a past IBAA president and chairman of Gulf National Bank in Texas City, Tex. “Don’t tinker with something the public has confidence in.”

He suggested that S&Ls; use the logo “FSLIC, managed by FDIC.”

L. William Seidman, the FDIC chairman, was more caustic in his speech to bankers. Seeking ideas on how to change the Bush proposal on logos, he suggested that bankers use the term “FDIC-Banks” and S&Ls; use the term “FDIC Fizzle,” a play on the term FSLIC that gets in a dig at the S&L; industry’s failures.