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Regulators Seize Control of 45 More Troubled S

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From a Times Staff Writer

Federal regulators Thursday seized control of 45 more savings and loan associations in eight states, including 21 in Texas alone, in another step toward bringing insolvent thrifts under federal control to minimize financial losses.

Thursday’s move by the Federal Deposit Insurance Corp. brings the total under the agency’s control to 118 thrifts in 24 states. The latest failed thrifts to be taken over had assets totaling $13.6 billion.

In a related development, the Bush Administration announced Thursday that it opposes federal regulators’ practice of offering tax breaks to attract buyers for insolvent savings and loan institutions.

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Regulators used tax incentives in the sale of 75 institutions late last year.

“Unequivocally, we do not favor the continuation of favorable tax treatment,” White House Budget Director Richard G. Darman told the Senate Finance Committee. The Federal Home Loan Bank Board has estimated the tax revenue losses from those sales at $4 billion.

Congressional leaders have also spoken out against continuing the tax breaks.

President Bush, in one of the earliest acts of his Administration, ordered seizure of insolvent S&Ls; because the insurance fund that guarantees deposits of up to $100,000 is far short of the cash needed to close down institutions crippled by bad loans and mismanagement during the economic upheavals of the 1980s.

The regulators, upon taking over the additional 45 thrifts, will take steps to prevent further financial hemorrhaging with the object of holding down the eventual cost of guaranteeing the deposits.

The FDIC, which under a Bush proposal is to become the agency responsible for surviving S&Ls; as well as for the nation’s banks, has sought to reassure depositors that the thrift institutions the agency takes over will remain open as usual and that all deposit accounts up to $100,000 will remain fully protected by federal deposit insurance.

Besides the 21 Texas S&Ls; seized Thursday, there were nine in Colorado, four in Tennessee, three each in New Mexico and Pennsylvania, two each in Alabama and Georgia and one in Michigan.

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