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

DATE: TUESDAY, February 22, 1994                   TAG: 9402220052
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-6   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Short

END OF THE S&L CRISIS IN SIGHT

Nearly five years after the government launched its cleanup of the savings and loan industry, the end is in sight, but the cost to the taxpayers is steep - $150 billion and counting.

While the industry is no longer in financial trouble, echoes of the S&L disaster remain, like the 1989 failure of an obscure Arkansas thrift, Madison Guaranty Savings and Loan.

Madison's owner - 11 years before the failure - invested in some rural real estate with a small-state governor who later became president.

On Thursday, Republicans hope to turn a congressional hearing on the performance of the Resolution Trust Corp. into a forum on President Clinton's long-ago investment.

The thrift industry now looks like this: last year, only 10 S&Ls failed, the fewest since 1979. None have failed so far this year.

The industry - about half its former size - is profitable. It earned $8.9 billion since the start of 1992. And the government bureaucracy charged with cleaning up the mess is making plans to close - its work finished - by the end of next year.

So what did the taxpayers get for all their money?

According to economists, the payoff is not in what taxpayers gained but in what they avoided: a collapse of the financial system and the irrevocable rupturing of public trust in the government.

"The taxpayers stepped up because the government had already guaranteed the depositors would not take a loss," said University of Houston Professor Paul Horvitz. "The government and the taxpayer had to make good on that obligation. There was really no alternative."

by CNB