SENATOR BARS THRIFT UNIT BILL (original) (raw)
Business|SENATOR BARS THRIFT UNIT BILL
https://www.nytimes.com/1981/12/10/business/senator-bars-thrift-unit-bill.html
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- Dec. 10, 1981
Credit...The New York Times Archives
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December 10, 1981
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Section D, Page
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Jake Garn, the chairman of the Senate Banking Committee, announced today that his panel would not consider Housepassed emergency legislation this year to give Federal regulators new powers to deal with financially troubled savings institutions.
But the Utah Republican said that because a ''significant consensus'' was developing between trade associations representing commercial banks and those representing the thrift institutions - savings banks and savings and loan associations - the committee would take up broader legislation early next year.
Mr. Garn's decision comes despite repeated requests by the Federal Reserve Board chairman, Paul A. Volcker, and the Federal Deposit Insurance Corporation chairman, William M. Isaac, for emergency powers to merge financially troubled thrift institutions across state lines and to ease limitations on providing capital infusions. Legislation passed in the House of Representatives addressed these requests.
The House Banking Committee chairman, Fernand J. St Germain, Democrat of Rhode Island, said he was ''gravely disappointed'' by the Senate panel's action. He noted it would ''add to uncertainties'' in the financial community. Interest Rate Drop Cited
Mr. Garn said that recent reductions in interest rates in recent weeks had relieved some of the financial pressure on thrift institutions, which have been forced to pay more for their funds than they have been able to earn on their portfolios, made up mostly of long-term, low-yielding bonds and mortgages. He said the situation ''appears to be manageable under existing laws and economic conditions.''
Mr. Garn, speaking at a Capitol Hill news conference, was joined in this assessment by Senator John Heinz, Republican of Pennsylvania, and Senator Alfonse D'Amato, Republican of New York.
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