PRESS RELEASE
Federal Deposit Insurance Corporation
March 15, 1995
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's
banking system. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing
risks to which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its
operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically
(go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information
Center (877-275-3342 or 703-562-2200). PR-20-95
FDIC CHAIRMAN HELFER SAYS THRIFT CONVERSIONS
MAY RAISE BANK COSTS
FOR IMMEDIATE RELEASE
Large thrift institutions considering becoming banks in order to lower their deposit
insurance fees would force existing banks to pay higher insurance premiums, FDIC
Chairman Ricki Tigert Helfer said in a speech today. She added that the solution is not
to block the thrifts from converting to banks, but instead to remove the incentives for
them to flee the financially-strapped Savings Association Insurance Fund (SAIF).
Speaking to the Exchequer Club in Washington, Chairman Helfer noted that, to date, six
SAIF-insured institutions have indicated publicly their plans to convert to savings banks
or commercial banks and thereby be members of the Bank Insurance Fund (BIF).
These institutions, which Chairman Helfer referred to as "born-again banks," hold
approximately $80 billion in SAIF-insured deposits.
"If BIF-insured deposits grow by roughly $80 billion," she said, "the BIF-insured
members have to come up with an additional $1 billion in assessments to cover the
growth in insured deposits. That's about four basis points added onto the premium for
BIF members for one year."
A copy of the speech is attached.
Federal Deposit Insurance Corporation
March 15, 1995
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's
banking system. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing
risks to which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its
operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically
(go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information
Center (877-275-3342 or 703-562-2200). PR-20-95
FDIC CHAIRMAN HELFER SAYS THRIFT CONVERSIONS
MAY RAISE BANK COSTS
FOR IMMEDIATE RELEASE
Large thrift institutions considering becoming banks in order to lower their deposit
insurance fees would force existing banks to pay higher insurance premiums, FDIC
Chairman Ricki Tigert Helfer said in a speech today. She added that the solution is not
to block the thrifts from converting to banks, but instead to remove the incentives for
them to flee the financially-strapped Savings Association Insurance Fund (SAIF).
Speaking to the Exchequer Club in Washington, Chairman Helfer noted that, to date, six
SAIF-insured institutions have indicated publicly their plans to convert to savings banks
or commercial banks and thereby be members of the Bank Insurance Fund (BIF).
These institutions, which Chairman Helfer referred to as "born-again banks," hold
approximately $80 billion in SAIF-insured deposits.
"If BIF-insured deposits grow by roughly $80 billion," she said, "the BIF-insured
members have to come up with an additional $1 billion in assessments to cover the
growth in insured deposits. That's about four basis points added onto the premium for
BIF members for one year."
A copy of the speech is attached.
Remarks
by
Ricki Tigert Helfer, Chairman
Federal Deposit Insurance Corporation
Before the Exchequer Club
Washington, D.C.
March 15, 1995
Thank you.
A number of years ago, I came across a copy of a marvelous letter -- dated April, 1829 -
- from Martin Van Buren, then- Governor of New York, to President Andrew Jackson. It
began:
"Dear President Jackson:
"The canal system of this country is being threatened by the spread of a new form of
transportation known as railroads. The federal government must preserve the canals for
the following reasons:
"One -- If canal boats are supplanted by railroads, serious unemployment will result.
Captains, cooks, drivers, repairmen and lock tenders will be left without means of
livelihood, not to mention the numerous farmers now employed in growing hay for
horses.
"Two -- Boat builders would suffer and tow-line, whip and harness makers would be left
destitute.
"Three -- Canal boats are absolutely essential to the defense of the United States. In the
event of the expected trouble with England, the Erie Canal would be the only means by
which we would move the supplies so vital to waging war.
As you may well know, Mr. President, railroad carriages are pulled at the enormous
speed of 15 miles per hour. In addition to endangering life and limb of passengers, they
roar and snort their way through the countryside, setting fire to crops, scaring the
livestock and frightening children. The Almighty certainly never intended that people
should move at such breakneck speed.
"Sincerely, Martin Van Buren"
What a gem! Over the years, I have heard the letter quoted to illustrate: one, the attitude
of people toward change; two, the fundamentals of persuasive lobbying; and, three, how
Washington never changes.
by
Ricki Tigert Helfer, Chairman
Federal Deposit Insurance Corporation
Before the Exchequer Club
Washington, D.C.
March 15, 1995
Thank you.
A number of years ago, I came across a copy of a marvelous letter -- dated April, 1829 -
- from Martin Van Buren, then- Governor of New York, to President Andrew Jackson. It
began:
"Dear President Jackson:
"The canal system of this country is being threatened by the spread of a new form of
transportation known as railroads. The federal government must preserve the canals for
the following reasons:
"One -- If canal boats are supplanted by railroads, serious unemployment will result.
Captains, cooks, drivers, repairmen and lock tenders will be left without means of
livelihood, not to mention the numerous farmers now employed in growing hay for
horses.
"Two -- Boat builders would suffer and tow-line, whip and harness makers would be left
destitute.
"Three -- Canal boats are absolutely essential to the defense of the United States. In the
event of the expected trouble with England, the Erie Canal would be the only means by
which we would move the supplies so vital to waging war.
As you may well know, Mr. President, railroad carriages are pulled at the enormous
speed of 15 miles per hour. In addition to endangering life and limb of passengers, they
roar and snort their way through the countryside, setting fire to crops, scaring the
livestock and frightening children. The Almighty certainly never intended that people
should move at such breakneck speed.
"Sincerely, Martin Van Buren"
What a gem! Over the years, I have heard the letter quoted to illustrate: one, the attitude
of people toward change; two, the fundamentals of persuasive lobbying; and, three, how
Washington never changes.