‘Monster’ Bailout for S&Ls; Signed by Bush : Steps to Deal With Failing Thrifts Taken Shortly After Ceremony in Rose Garden

President Bush, saying, “I’m proud to sign this monster,” today put his signature on sweeping legislation to rescue the nation’s troubled savings and loan industry and put a $50-billion bailout into effect.

Architects of the nearly foot-high bill, which authorizes $50 billion in new government borrowing over the next 26 months, attended the Rose Garden ceremony.

The bill also imposes tough new standards on savings and loan institutions and triggers the most sweeping overhaul of the regulatory bureaucracy in 50 years.

Along with the late-morning signing of the measure, Bush was ordering his Administration to gear up to close or merge hundreds of failed institutions. The first meeting of a new board to oversee their holdings was called immediately after the ceremony.

Bush said the measure, which received final congressional approval Saturday, “says to tens of millions of savings and loan depositors: You will not be the victims of others’ mistakes.”

‘Safeguard and Stabilize’

Among the 300 people at the signing ceremony were Treasury Secretary Nicholas F. Brady, Housing and Urban Development Secretary Jack Kemp and key Capitol Hill sponsors, including Sen. Donald W. Riegle Jr. (D-Mich.) and Rep. Henry B. Gonzalez (D-Tex.), chairmen of the congressional banking committees.

“This legislation comes to grips with the problems facing our savings and loan industry. It will safeguard and stabilize America’s financial system,” Bush declared.

He called the measure, a variation on a bailout plan that he submitted to Congress on Feb. 6, “historic legislation.”

“It is responsive and responsible. And for that, I salute the Congress,” the President said.

Bad Loans, Repossessions

Immediately after the signing ceremony, Brady conducted the first meeting of the board overseeing the Resolution Trust Corp. The RTC was created to manage the sale of sour loans and repossessed real estate the government is inheriting from ailing savings and loans.

The RTC board, whose members also include Kemp and Federal Reserve Chairman Alan Greenspan, will approve operating policies for the Federal Deposit Insurance Corp., the agency charged with managing the bailout.

The FDIC has already taken over 262 failed thrifts, and the first deals to wipe out their losses and put them in the hands of new owners could come as early as this week.

Earlier, the Treasury Department announced plans to borrow the first $5-billion installment of the bailout Thursday and said it intends to raise an additional $15 billion within eight weeks.