Reagan Bears Some Blame for S&L; Woes, Officials Say

The chairman of the Senate Banking Committee said Sunday that there is plenty of blame to go around for the troubles in the thrift industry but that President Reagan bears some responsibility for the crisis.

Sen. Donald Riegle (D-Mich.) also said he has asked the General Accounting Office to investigate the “December deals” that a government agency made at cut rates to unload insolvent thrifts, and the investigative arm of Congress should release its report Feb. 2.

Riegle and L. William Seidman, chairman of the Federal Deposit Insurance Corp., appearing on NBC’s “Meet the Press,” assured depositors that their money in the nation’s savings and loans is protected by federal insurance.

But Seidman, estimating the cost of an industry bailout at between $85 billion and $105 billion, cautioned that the nation’s thrifts will need to undergo drastic reforms to prevent another similar crisis.

Seidman’s FDIC does not deal directly with savings & loans, but the agency has been examining the crisis in the thrift industry and he said the blame for the problem is widespread.

“The short list includes regulators who relaxed standards; the Administration, which did not provide the resources to allow regulators to do a good regulatory job; Congress, for failing to provide resources to meet the situation--there’s plenty of blame for everybody,” he said.

Riegle said he agreed with Seidman’s list and added: “Congress certainly has to accept its share of the responsibility, but I think . . . the regulatory process broke down. I think the accounting treatment was changed in ways that did not reflect what the actual circumstances were.”

In addition, Riegle said, “The President himself bears some responsibility. I was just thinking on the way in whether I had ever heard the President talk about the savings and loan problem. To my memory, I don’t recall a single time, and yet we’re now hearing, and I think the estimates are accurate, that we’re looking at a loss of 75 or 85 and 105 billion dollars. That’s an awful lot of money to disappear.”

At the end of 1988, the Federal Home Loan Bank Board--which regulates the industry--spent $38 billion to put dozens of ailing savings institutions in new hands.

Bank board Chairman M. Danny Wall, speaking on CBS’ “Face the Nation,” defended the bailouts, saying: “The focus has been on one or two of the deals we made. We did 34, we packaged 34 sets of institutions in the month of December. Twenty-seven of them went to either a bank holding company, or to a thrift institution.”