H.F. Ahmanson & Co., parent of Home Savings of America, the nation's largest savings and loan, Friday joined a rebellion of huge California thrift institutions against what they regard as an unfair competitive advantage being handed to their banking industry rivals.
Irwindale-based Ahmanson announced that it would seek regulatory permission to establish one or more state-chartered savings banks whose deposits would be insured by the same federal fund that covers commercial banks.
The emerging revolt threatens the stability of the federal insurance fund protecting savings and loan deposits, some experts say, and may increase political support for an idea that has been debated for years: merging the bank and thrift industries.
Indeed, Rep. David Dreier (R-San Dimas), powerful vice chairman of the House Rules Committee, this week renewed his call "to end the artificial separation between banks and thrifts."
Ahmanson's state banks would become the vehicle for Home Savings to shift the bulk of its $40 billion in deposits out of the separate savings and loan insurance fund and into the bank fund. The goal is to take advantage of a huge cut in deposit insurance premiums proposed for the bank fund.
The Federal Deposit Insurance Corp., which oversees the two funds, plans to slash premiums for the bank fund to an average of 4.5 cents per $100 of deposits, from about 23.5 cents now.
But savings and loan premiums would stay at 23.5 cents, meaning that thrifts would pay nearly six times as much as banks. Part of the reason for maintaining the thrift premiums at that level is that 45% of the money pays interest on bonds issued to help resolve the savings and loan crisis.
On March 1, Great Western Financial Corp., parent of the nation's second largest thrift, started the rebellion by announcing plans to seek national commercial bank charters in California and Florida in order to move deposits into the bank fund. California Federal Bank followed suit on Monday, saying it was considering similar action.
The FDIC plan "will place Home Savings and other well capitalized thrifts at a significant and completely inappropriate competitive disadvantage," Charles R. Rinehart, Ahmanson's chairman and chief executive, said Friday.
But James A. Chessen, chief economist for the American Bankers Assn., countered that what is really happening is an attempt by the largest and richest thrifts to "make an end-run around their responsibility to help resolve the savings and loan mess."
Industry analyst Bert Ely said in an interview Friday that the thrifts can probably get regulatory approval for the bank charters, but he speculated that they would prefer not to have to go that far.
Rather, Ely said, the thrifts hope the prospect of a mass exodus out of the savings and loan fund by the biggest and best-capitalized institutions will focus political attention on the issue by a Congress anxious to avoid another savings and loan crisis.
"This also puts a lot of pressure on the banks to come to the table" and discuss assuming part of the burden for payments on the thrift-bailout bonds, he added.
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