Bank Insurance Hike Is Put Off

Under heavy pressure from bankers, the Federal Deposit Insurance Corp. board on Tuesday postponed an increase in its insurance premiums until next year, when it hopes to have a system for charging risky banks more than safe banks.

The chairman of the Senate Banking Committee, Donald W. Riegle Jr. (D-Mich.), and other lawmakers had been pressing for an increase this year to ensure repayment of the agency’s borrowings from taxpayers.

But bankers and officials of the Federal Reserve and Treasury Department have warned that raising the charges paid by banks could hurt their ability to make loans needed to stimulate the recovery.

Although the FDIC board took no vote on the issue, all five members said they agreed that any increase should take effect Jan. 1 rather than July 1.

Rep. Henry B. Gonzalez (D-Tex.), the chairman of the House Banking Committee, charged that the delay was “a convenient way to provide a comfort zone for the banking industry through next fall’s election.”

“This may also mean that many dangerously sick banks simply will not be closed in the coming months because the FDIC’s premium income is insufficient,” he said. “The Congressional Budget Office believes this is already happening.”

Both banks and savings institutions this year are paying 23 cents for every $100 in deposits, nearly triple the 8.3-cent premium in 1989. The FDIC staff is recommending it be raised to between 25 cents and 30 cents in 1993.

FDIC Chairman William Taylor said conditions in banking have improved a bit since November and December.