WASHINGTON -- A top Treasury official said yesterday that the Bush administration had reluctantly agreed to accept a new approach suggested by the nation's senior banking regulator for running the savings and loan bailout.
Appearing before a House Banking subcommittee, the deputy treasury secretary, John E. Robson, said that he and L. William Seidman, the chairman of the Resolution Trust Corp., had come up with "something we would find acceptable" to restructure the agency.
But Mr. Robson's endorsement of the restructuring concept was tepid at best, and he continued to repeat the adminstration's position that no changes should be made at the agency overseeing the savings and loan bailout.
The administration is seeking $80 billion in additional funds to complete the bailout, which is expected to run out of money by year'send. But Congress, unhappy with the pace of the bailout, is trying to link new financing with some type of structural overhaul at Resolution Trust, and Mr. Robson bowed to that reality yesterday.
"We are not unaware of the fact that this issue is in the minds of a lot of members of Congress," he said, "and for that reason we sat down with Bill and said, 'If we're going to get hit by a truck, what kind of a truck would we like to get hit by?' "
The proposal the two sides agreed to was submitted to the subcommittee yesterday by Mr. Seidman, who also heads the Federal Deposit Insurance Corp., the main bank regulator. The measure would eliminate FDIC control over Resolution Trust, hire a chief executive to run the agency and reduce the power of the agency's oversight board, whose members include such administration officials as Nicholas F. Brady, the treasury secretary; Alan Greenspan, the Federal Reserve chairman; and Jack F. Kemp, secretary of housing and urban development.
The proposal represents an accommodation by the administration, which had feared that any tampering by Congress with the 1989 law that created Resolution Trust would have unpredictable results. And it comes just as Mr. Seidman is about to step down as chairman of the FDIC, which, because of the growing number of bank failures, is straining to oversee the savings and loan bailout.
Both the administration and the FDIC are also searching for a replacement for David C. Cooke, the agency's executive director and a protege of Mr. Seidman's.
The subcommittee chairman, Frank Annunzio, D-Ill., asked Mr. Seidman about an article in American Banker this week that said Resolution Trust was planning to borrow money to help finance some faltering savings institutions rather than to have them rely on high-cost brokered depositors for funds.
Mr. Seidman replied that he would like to pay off these deposits that the savings units hold, but that "the answer is very simple Mr. Chairman: You can't pay off brokered deposits unless you have the money to pay them off; and we haven't had the money."