Stumping for a tighter rein on savings and loan associations, the nation's top thrift regulator said Monday that non-traditional investments by lenders amount to little more than a gamble of federal insurance funds.
"There are too many institutions in our business that have thrown the dice," said Edwin J. Gray, chairman of the Federal Home Loan Bank Board. "If it's heads, then the institution wins. If it's tails, than the Federal Savings and Loan Insurance Corp. loses."
Speaking to an audience of about 900 at the 24th Orange County Economic Outlook Conference in Anaheim, the embattled bank board chairman voiced his oft-repeated warning that the FSLIC insurance fund, used to repay depositors in failed thrifts, is running low.
When the 99th Congress adjourned Saturday, it had not approved a banking bill, which would have among other things, provided about $15 billion in badly needed funding for the FSLIC. The FSLIC insures $800 billion in deposits at 3,000 institutions.