The American Bankers Association, in uncharacteristic fashion, lashed out yesterday at the savings and loan industry's repeated criticism of efforts by a federal panel to speed deregulation of the two industries.
In a statement yesterday, the ABA called the U.S. League of Savings Associations' continuing assault on the Depository Institutions Deregulation Committee "outrageous" and charged that the league is "seeking to unravel" this year's omnibus banking law "with unseemly talk of doom." The DIDC is charged with administering the deregulation law.
"What the S&Ls have been doing since May 28 (the date of a controversial DIDC meeting) is in the news-release-a-day mentality," said an ABA spokesman. "They have some new prediction of gloom and doom every day."
The savings and loan industry -- through its leading trade association, the U.S. League -- has sued the DIDC over a ruling which lifted a one-quarter-percentage-point interest differential on six-month money market certificates.
Further, the league and its president, Edwin Brooks, repeatedly have charged that the decision will result in continuing hard times for the nation's savings and loan and housing industries.
For the most part, the ABA seldom takes its positions to the public as it did yesterday in an attack on the repeated dire predictions of the S&L industry. "But the alarmist talk that is heard in some quarters, and the claims that a quarter-percent (sic) differential will solve the housing problem, are absurd," the ABA said. "They are shot through with false assumptions.
"The S&Ls' claims are predicated on the notions that money in banks will not go to housing -- it does and in greater numbers each year -- and that some special 'commitment' to housing -- a commitment from which S&Ls have been moving away for years -- entitles them to an anticompetitive advantage."
But the bankers' association, whose members have been gaining an increasing share of the mortgage market, said the answer to the housing problem is deregulation. In fact, the nation's banks now are getting more than 21 percent of new residential mortgages, up by more than 2 percent in the last three years, while the S&L industry's share of mortgage money has dropped even more dramatically.
"Deregulation will permit banks to continue to increase their roles as housing leaders while permitting specialized thrifts to diversify their services," the ABA said. "Deregulation will allow all depository institutions to pay market rates to savers, thus assuring a healthy, stable base for housing and other credit needs."
But in testimony prepared for delivery to the House Banking Committee today, the U.S. League's Brooks called it an illusion to hope for a revival of the sagging housing industry.