
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, April 6, 1990                   TAG: 9004060949
SECTION: EDITORIAL                    PAGE: A14   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

FEW CREDENTIALS, BUT RYAN IS OK'D

ONCE, THE word around Washington was that the savings-and-loan situation could be salvaged for a mere $20 billion or so. The price tag had risen to $90 billion by the time the Bush administration revealed its reform plan in January 1989. Estimates now range from $150 billion to $250 billion; the broad difference between those figures is an indicator of nail-biting uncertainty. More S&Ls are failing every week, and every one pushes the bailout cost higher.

On Wednesday, the Senate approved the nomination of Timothy Ryan to head the Office of Thrift Supervision. Seventeen Democrats joined 45 Republicans in voting to confirm; all 37 votes against confirmation were cast by Democrats.

If the Senate acted with uncharacteristic speed - Ryan was confirmed within a week of his nomination - President Bush was notably laggard in appointing a successor for the discredited Danny Wall. Wall announced in December he was leaving and finally did so three months later.

Some senators were troubled by Ryan's own revelation that he toyed with illegal drugs as a student 17 years ago. But given Ryan's apparently clean record since then, his youthful indiscretions should not have been a bar to the appointment. Much more to the point were his qualifications, or lack thereof. He is a pension and labor lawyer with no experience in finance or its regulation.

Late last week, the Senate Banking Committee had approved his nomination by 11-10; some Republicans supported him only because of White House pressure. During the hearings, Florida Republican Connie Mack, a former banker, told Ryan: "You don't have the background or the scope of knowledge to understand what is happening out there in the trenches." But Mack voted for Ryan at the request of Treasury Secretary Nicholas Brady.

Asked last month about Ryan's lack of financial experience, White House spokesman Marlin Fitzwater said: "Frankly, we've had a little trouble finding people in the banking industry who want to take this job." He added that the record of S&L management didn't inspire confidence in that field either. A worthy point, perhaps, although one recalls that when Franklin D. Roosevelt wanted someone to end stock-trading shenanigans in the 1930s, he picked Joseph Kennedy, a man who knew every trick in the book because he'd played them when they were legal.

It's hard to avoid the conclusion that both White House and Congress have avoided grappling with this issue because (1) it's surpassingly tangled and (2) both parties have soiled their hands on it.

Bush was part of the Reagan administration that wanted to lift regulatory fetters from the industry; now he hangs back, as he does from many other difficult matters where his popularity might suffer. Congress went along with past deregulation and issued an invitation to loose investing by raising deposit insurance. It seems that a few senators, mostly Democrats, also lent their influence to help keep political contributor Charles Keating's shaky S&L from being closed down.

There was blame to go around in the making of this scandal. Sad to say, there's also blame to go around in the handling of the rescue operation. Senate opponents should have focused not on Ryan's long-ago drug experiments but on whether he can perform a vital task. The White House should have searched high and wide to find a more qualified regulator, then made clear it would back his or her cleanup efforts to the hilt.

The bailout cost has reached $1,300 for every American taxpayer. Let's hope Ryan is up to the job of putting the thrifts' house back in order.

by CNB