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

DATE: SATURDAY, October 21, 1995                   TAG: 9510230114
SECTION: BUSINESS                    PAGE: A-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

BANK PLAN REVISED

Leach, R-Iowa, proposed a radical change to an unrelated thrift deposit insurance fund bailout bill that pleased the banking industry. The change meant banks no longer would have to pay much of a $790 million annual payment on bonds related to the S&L bailout.

Instead, Leach proposed to shift the payments to three giants of the home mortgage business - Fannie Mae, Freddie Mac and the Federal Home Loan Bank System. The plan generated fierce opposition from the mortgage companies, as well as the Treasury Department.

Fannie Mae and Freddie Mac are government-sponsored enterprises that buy mortgages from thrifts and banks and resell them to Wall Street investors. The companies enjoy an inexpensive source of funding and exemption from state income taxes.

The sudden developments serve to further muddy the already complex prospects for a change in banking law this year. Leach's bill was supposed to move to the House Rules Committee this week, but was delayed because of other conflicts.

The far-reaching proposal would let banks and Wall Street firms combine by repealing the 60-year-old Glass Steagall Act. The bill also would cut red tape for banks by revising several consumer protection laws such as the Truth in Savings Act.

While banks would benefit from these provisions, the American Bankers Association formally opposed the Leach package Friday because it would place a five-year moratorium on regulators' ability to expand bank insurance powers.