The fight had been simmering for months, but by most accounts, the gloves came off July 31, when ABC's "Nightline" dedicated its 30-minute program to the faltering health of the commercial banking industry.

"I believe we are in the midst of the largest government coverup of a financial scandal ever in the country's history," said guest R. Dan Brumbaugh Jr., an economist who in the early 1980s earned fame as one of the first to predict the thrift debacle.

Nightline's other guest, L. William Seidman, the chairman of the Federal Deposit Insurance Corp., took quick -- and lasting -- offense, responding with visible anger by calling Brumbaugh "irresponsible" and questioning his judgment.

"It's shouting fire in a crowded theater," Seidman said.

From that night forward, Brumbaugh, the man who has made a career predicting gloom-and-doom for the financial industry, became the most vilified naysayer on the regulators' list.

The 43-year-old graduate of Colgate and George Washington universities repeatedly accuses federal banking regulators of hiding the problems of the nation's banking system. He says regulators don't tell the public the truth, that many major banks are already insolvent, that the deposit insurance fund is broke and that lack of full disclosure will lead to a replay of the thrift crisis.

Regulators call him a "banking terrorist" who is full of hot air and serves no purpose but to scare the public. Brumbaugh's claim that the deposit insurance fund is broke is wrong, they say, and his charge of a coverup outrageous.

"Brumbaugh's credibility suffers from his penchant for self-aggrandizement and for treating difficult and complex issues in simplistic and sensationalistic terms," said Alan Whitney, chief spokesman for the FDIC. "It's hard to take seriously a man who alleges that everyone who disagrees with him is engaged in a conspiracy to hide the truth and to silence him."

There are many critics of the banking industry and many doomsayers about its future. But none seems to earn the scorn that Brumbaugh does. It's Brumbaugh's trademark no-if-ands-or-buts statements and his knack for insulting those in charge that have landed him so deeply in the soup as far as the Bush administration is concerned, friends and foes alike agree. And no one should be better able to sympathize with that than Brumbaugh's harshest critic -- Bill Seidman.

Seidman, like Brumbaugh, was one of the severest critics of the thrift industry and its regulators during the 1980s. His off-the-cuff, derisive comments about Bush administration plans to tax depositors in an effort to raise money for the thrift cleanup caused White House Chief of Staff John Sununu to try to get Seidman fired as a top regulator of the banking industry.

Now the tables are turned and it is Seidman who is lashing out against accusations the government is bungling its handling of a financial crisis.

On Monday, Brumbaugh and two colleagues -- James R. Barth and Robert E. Litan -- presented a subcommittee of the House Banking Committee with a gloomy report on the status of the banking industry and the deposit fund.

"The bank insurance fund is insolvent," Brumbaugh testified to the subcommittee. He said that bank failures over the next three years conservatively will cost $43 billion, more than $10 billion short of the resources the FDIC has available to cover such losses. Eventually, that means the taxpayers will have to pick up some of the tab.

"Baloney," Seidman responded, insisting that, at least for now, the fund is not broke.

And yet, even some critics acknowledge Brumbaugh may well prove right about the extent of the banking industry's problems, even if he's wrong about a coverup.

The biggest criticism the FDIC officials have of the study, they say, is that it overstates potential costs under a mild recession and vastly understates costs should a severe recession like the one that plagued Texas in recent years occur nationwide. Of Brumbaugh, they say he is a sloppy researcher who draws unwarranted conclusions from improperly analyzed data. But no estimate is perfect, regulators say, and they admit their own projections are as much art as science.

The real friction between the two is whether there's going to be a taxpayer bailout and whether the full truth is being told to the public.

Brumbaugh assures that by "coverup" he's not suggesting criminal activity "like in Watergate or anything." Brumbaugh himself was head of a small California thrift that has since failed, though no one suggests he caused the institution's demise. What Brumbaugh said he means by a coverup is this: "The insurer's incentive changes when the insurer realizes it no longer has the resources to close all insolvent institutions. At that point, it realizes it cannot do its job and therefore has an incentive to cover up the fact{s}. ... "

As to Seidman's claim that he has been open about the industry's problems, increasing his estimate of the potential cost regularly, Brumbaugh scoffs.

"He's only gone as far as critics have pushed him," Brumbaugh said.

Seidman has never been "out in front" on the problems," added Brumbaugh. "He's moved the way he has because of what he knows was in our report."

Seidman declined to be interviewed for this article.

Despite their differences, Seidman and Brumbaugh can sound remarkably similar. Both agree the system is troubled and cannot withstand a severe downturn without serious repercussions.

So why has this turned into such a personal test of wills?

"I think we had a national debate on national TV and I think he lost the debate," Brumbaugh said of the "Nightline" show in July. "I think that's the source of his animosity. ... He's tried to isolate me and make it seem I'm out on a limb, outside the mainstream. I've never said a single uncomplimentary thing about Seidman."

But to Seidman, an allegation of a government coverup can be interpreted in no way other than a personal insult. It's an accusation Litan and others have been careful to avoid making.

After the "Nightline" show, Brumbaugh was ousted from a nonpaying post as a senior research scholar at Stanford University. Stanford claims it ended the relationship because it objected to Brumbaugh being represented as a Stanford economist, which he wasn't. (Seidman even took to calling him the "non-Stanford professor.")

Though he can't prove it, Brumbaugh believes that Michael Boskin, chairman of the Council of Economic Advisers and former chairman of Stanford's economic policy center, pressured the university to throw him out. Stanford officials deny the charge.