BANKING/FINANCE

S&L; Bailout Law: Many have criticized the federal law that was enacted last year to bail out the savings and loan industry’s deposit insurance system, but few thrift operators openly criticize the law and the regulators charged with enforcing it.

Robert F. Adelizzi, however, came to Anaheim for a recent conference and took a few shots at the law and its major creation, the Resolution Trust Corp., which manages failed thrifts.

“Congress has trashed the value of the (thrift) charter, created a timid and overly reactive regulator and now expects the RTC to sell damaged goods,” the president and chief executive of HomFed Bank in San Diego said at the annual meeting of the Financial Managers Society, which met in Anaheim.

He said the law, instead of containing costs, is exacerbating the problems in the industry. Some experts estimate the cost of bailing out the thrift industry at $300 billion to $500 billion.

“Faced with higher costs and the difficulty of attracting capital, more institutions will fail, thereby increasing the RTC caseload and the ultimate cost to the taxpayer. (The law) is less a recipe for a rescue than a requiem.”

Adelizzi, however, said it wasn’t too late to halt the slide. He suggested a freeze on the formation of new thrifts and on new branches, except through acquisition of branches from RTC.