THRIFTS : Amendments Hamper S&L; Bailout Bill

House members have flooded the Rules Committee with more than 100 proposed amendments to savings and loan bailout legislation, dimming the chances of floor action this week.

The Bush Administration, which announced its S&L; proposal on Feb. 6 and challenged Congress to act within 45 days, has shown increasing impatience with the pace of action in the House.

The Rules Committee, chaired by Rep. Joe Moakley of Massachusetts, the ranking Democrat after the death last week of former chairman Claude Pepper, is scheduled to consider the S&L; legislation today. It will decide which amendments will be considered by the full House when it takes up S&L; legislation written by the Banking, Judiciary and Ways and Means panels.

House Majority Leader Thomas Foley, (D-Wash.), told Moakley last week that he wants the Rules panel to finish work today so the House can take up the bill on Wednesday.

However, nearly 50 House members have asked to speak to the Rules Committee and the panel must wade through more than 109 amendments, a difficult task to complete in one day.

If the Rules Committee finished work Wednesday, the full House could begin debate on Thursday, but the chamber is out of session on Friday, so any vote likely would be delayed until next week.

“The Senate passed this thing on April 19 and the losses (in S&Ls;) have grown by over $500 million since that date,” said Assistant Treasury Secretary David W. Mullins.

The industry “is just hemorrhaging out there and every day they delay passage costs at least $10 million,” he said.

More than half a dozen of the amendments under consideration would weaken what the Administration considers the key change in the bill--a requirement that S&L; owners invest at least $3 in tangible or “real money” capital for every $100 in lending. A high capital level acts as a buffer, absorbing losses before federal deposit insurance kicks in.

Rep. Frank Annunzio, (D-Ill.), chairman of the House Banking Subcommittee on Financial Institutions, had planned to offer an amendment that would allow regulators, at their discretion, to count “supervisory goodwill” as tangible capital, but pulled back after the Administration decided to oppose it.

Supervisory goodwill is an accounting break offered by regulators in the early 1980s to institutions that took ailing S&Ls; off the government’s hands.

Annunzio argued that it is unfair to penalize S&Ls; who took the accounting break at the government’s urging. However, the Administration argues that it is unfair to taxpayers to allow the institutions with supervisory goodwill to operate with none of their owners’ money at risk.

Annunzio and other House members from Illinois, including Republican Leader Robert Michel, met with Treasury and White House officials last Thursday in attempt to secure the Administration’s support for their compromise amendment. However, Mullins said the proposal “is simply not acceptable to us.”

As an alternate, Annunzio will back an amendment by Rep. Henry Hyde, (R-Ill.), that would permit institutions with goodwill to use administrative appeals to delay the imposition of tougher capital rules for up to 18 months.

Other proposed amendments would reopen virtually every major battle already fought in the committees that wrote the bill.

Several amendments would delete provisions designed to help provide housing to poor people. Others would weaken the requirement that the S&L; industry contribute $300 million a year to pay interest on government bailout borrowing.