SAN DIEGO — Apparently wary of the $25-million "hit" it would take in its proposed switch to being a state-chartered bank, Home Federal Savings & Loan is considering alternatives in its efforts to avoid paying multimillion-dollar special premiums to the undercapitalized Federal Savings and Loan Insurance Corp.
Among the alternatives being mulled by Home Fed is a switch to the status of being a state-chartered savings bank. Such an institution might be insured by the Federal Deposit Insurance Corp., which is in far healthier condition than the FSLIC.
State law, however, does not allow for such a charter, so Home Fed may lobby for its creation through new legislation, a spokeswoman said.
Last March, Home Fed applied for a state banking charter, in part to escape the special premiums that have been levied against it and other S&Ls by the FSLIC over the past three years to help pay for the insured deposits of failing thrifts.