Statement of Administration Policy: H.R. 5407 - Establishment of National Commission on the Thrift Industry

(Revised - LA 10/4/88)

(House)
(St Germain (D) Rhode Island and 24 others)

The Administration supports a strong deposit insurance system and was the leader in recapitalizing the Federal Savings and Loan Insurance Corporation. The Administration submitted a $15 billion recapitalization plan in May, 1986, of which $10,825 billion was subsequently approved by Congress on August 10, 1987.

The Administration does not oppose the establishment of a commission to examine Federal deposit insurance, provided that one of its primary functions is to analyze and make recommendations concerning the overall managerial and regulatory structure, exposure, coverage and financing of the Federal deposit insurance system, including both FDIC and FSLIC. Federal deposit insurance has, since its inception, underwritten the Nation's depository system by providing stability for financial markets. At the same time, it has protected the savings of millions of Americans, from loss. Consequently, any commission examining these issues should have a mandate to consider the broader issues of deposit insurance for the future.

The Administration believes, however, that H.R. 5407 can be improved in several respects. Accordingly, the Administration will work in conference to: (1) add the Director of the Office of Management and Budget and the Secretary of the Treasury as members of the Commission; (2) clarify that the Commission is located within the Executive branch by limiting to the President the authority to appoint the Commission's members in a bipartisan manner; (3) broaden the Commission's mandate to review issues of Federal deposit insurance; and (4) fund the Commission through a direct appropriation.