A sentence in Sen. Jake Garn's (R-Utah) newly unveiled banking bill would erase requirements that federal regulators solicit several rounds of bids when an ailing savings and loan institution is being sold.
Several dozen words, included in the Garn bill with the reluctant backing of many in the S&L industry, would eliminate a provision of a 1982 banking law that mandates rebidding under certain circumstances. Elimination of the rule would make it easier for financial giants like Citicorp to snap up ailing S&Ls at bargain prices.
The rebidding law is the basis of a lawsuit filed yesterday by Gordon Getty to stop the bank board from selling ailing National Permanent Bank, the District's second-largest thrift, to Citicorp.
Federal law requires the Federal Home Loan Bank Board, the federal agency that regulates and insures the S&L industry, to allow a local bidder whose offer falls within 15 percent or $15 million of a bid from an out-of-state competitor to rebid at a higher price. Garn accepted the provision at the request of the bank board, which has long argued that rebidding adds too much time and cost to the task of selling problem S&Ls.