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Subject: Thrift Supervision Chief to Depart Next Month; More Than 700 S&Ls Taken Over
Date: Mon, 9 Nov 92 05:41:19 EST
Message-ID: <49.1992Nov9.054120@AmeriCast.com>

Thrift Supervision Chief to Depart Next Month; More Than 700 S&Ls
Taken Over During Ryan's Tenure; Perhaps 110 Others Seen Still
Shaky<By Susan Schmidt<Washington Post Staff Writer=

Timothy Ryan, who in the past three years has presided over the
federal takeover of more than 700 failed savings and loan associ-
ations, will leave his post next month, he said.

Ryan, who several years ago signed off on sanctions against
President Bush's son Neil, is expected to announce his resigna-
tion as director of the federal Office of Thrift Supervision at a
meeting today of S&L executives in San Diego. His departure will
leave vacancies at the top at three of the four federal bank re-
gulatory agencies as the Clinton administration prepares to take
over the government.

Ryan was named to a five-year term as OTS director by Bush during
the height of the S&L crisis, and brought a tough, no-nonsense
attitude to the newly created agency. He succeeded in restoring
credibility to a regulatory system whose laxity during the 1980s
allowed S&L abuses to flourish.

In comments to reporters Friday that were embargoed until today,
Ryan said he leaves behind a cleanup of the S&L mess that is
close to completed, and a smaller, stronger group of surviving
institutions.

In a letter to Bush, Ryan called the S&L cleanup "a success story
which demonstrates that government can work."

Ryan told reporters that it was a "major frustration" to him that
Bush had not touted his administration's role in the cleanup dur-
ing the presidential campaign.

"My sense is there were too many personal issues involved," Ryan
said, in a reference to the president's son, who was formally
reprimanded by the OTS two years ago for violating conflict-of-
interest rules as a director of the now-defunct Silverado Savings
and Loan in Denver. Ryan said he has been "persona non grata" at
the White House ever since.

Ryan, a labor lawyer before taking the OTS post, did not specify
his plans. He said the agency will be run by Deputy Director
Jonathan Fiechter until a new director is named.

About 2,000 of 3,000 S&Ls remain.  Ryan said that as many as 110
of them, with $63 billion in assets, are still in shaky financial
condition and could fail within a year or two. Other sources, in-
cluding the Congressional Budget Office, have projected as many
as 600 to 700 more S&L failures.

The next director's first task will be to push Congress to ap-
prove more money to pay for closing insolvent S&Ls. The govern-
ment has been out of money for shutdowns since April 1, and has
been forced to continue operating institutions it has taken over
since then. Ryan estimated that $50 billion would finish a clean-
up that since 1989 has cost $88 billion to pay off depositors and
cover the other costs of closing institutions.

Ryan said he is urging S&L industry officials to return to the
business of financing home construction, particularly affordable
housing. "If they don't get back to their old-time religion,
somebody else will," he said, noting the new competition S&Ls
face from consumer finance companies.

Ryan said he is worried about the many banks and thrifts that
have curtailed lending and instead invested heavily in government
securities. They are reaping big profits now, but could suffer
losses if interest rates increase.  OTS has identified 80 thrifts
that would be in trouble if interest rates shifted upward by just
2 percentage points, Ryan said. Regulators have not studied what
such a shift would mean for banks, he said.

"Closing financial institutions is very hard; you're putting so
many people out of business," he said, adding that it has grown
progressively harder as he has gotten to know the people he regu-
lates. "You affect a tremendous number of lives. . . that's the
hardest part and quite frankly the job that had to be done."

Besides the OTS, there are acting heads at the Federal Deposit
Insurance Corp. and the Office of the Comptroller of the Curren-
cy, which together with the Federal Reserve Board regulate the
nation's 12,000 commercial banks. Although the crisis in the
banking industry does not appear as severe as that among savings
and loan associations, many commercial banks have failed and many
more could face solvency problems when more stringent federal re-
gulations take effect next month.<05:07 11-09C9999-----

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
chived or redistributed.

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