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About The Battalion. (College Station, Tex.) 1893-current | View Entire Issue (May 2, 1988)
Monday, May 2,1988/The Battalion/Page 7 hi Depositors upset about FDIC rules for small banks DALLAS (AP) — Small bank depositors and officers say they are being slighted by federal reg ulators who protect deposits in Texas’ large banks, but refuse to do the same for smaller institu tions. Randy Smith said his company had $202,000 in Park West Bank of Plano when it failed. A bank officer told him the Federal De posit Insurance Corp. would de termine whether to refund all of the money or whether the $100,000 FDIC insurance limit applied. Although some of the funds exceeding the $100,000 cap have been paid, Cecil Carr Construc tion Co. has yet to recover $86,000 from the account. But on March 17, regulators guranteed all deposits of troubled First Re- publicBank. “It’s a horror story,” Smith told the Dallas Times Herald. “Every one knew that the FDIC would bail out First Republic’s deposi tors, but Park West’s uninsured depositors were left to have their throats cut.” “Everyone knew that the FDIC would bail out First Republic s depositors, but Park West’s uninsured de positors were left to have their throats cut. ” — Randy Smith, depositor at failed bank Since the start of 1985, 2,980 accounts at 28 failed Texas banks have not been covered completely by the FDIC. During those same closings, $58 million of uninsured deposits have been placed at risk of not being covered by the FDIC. When First RepublicBank be gan having problems, regulators protected some $7.6 billion in de posits denominated in sums of $100,000 or more. The deposits amount is 131 times as much money imperiled in Texas’ small bank failures. “We were dealing with a wide spread crisis of confidence at First Republic,” FDIC spokesman Alan Whitney said. “We had no choice.” But the state’s independent bankers say federal regulators are discriminating against small bank depositors and small banks. They contend closure is or dered for small troubled banks while multibillion-dollar bailouts are given to banking giants such as First RepublicBank and First City Bancorporation of Texas. “The federal regulators are our judges, jury and execu tioners,” charges F. Hagen Mc Mahon Jr., director of the Inde pendent Bankers Association of Texas, which represents about 1,400 independent banks in the state. “They are not closing the large banks; they are closing our banks.” William Seidman, chairman of the FDIC, said the only solution for failed small banks is to close them and either pay off insured deposits or transfer the accounts to another institution and give uninsured depositors a claim against recoveries made during liquidation of the failed banks’ as sets. The unworkable alternative, he said, would have been to take over and operate each of the 140 U.S. banks that failed since 1985 and couldn’t be sold. Small-bank depositors aren’t suffering as much as Texas bank ers contend, regulators say. In the 109 Texas bank failures since the beginning of 1985, about $11.2 billion of deposits either have been transferred to acquir ing institutions or paid off 100 percent, Whitney said. But McMahon said members of his group of independent bankers have suffered, while the FDIC pumped $50 million into Dallas-based BancTexas Group, $1 billion into First City and $1 billion into First RepublicBank. “Let us point out that our bankers live in the same economy as the bankers working for First Republic,” McMahon said in an open letter to Congress Family buries Navy sailor killed in USS Bonefish submarine explosion ■ WILLIS (AP) — With carnations, flower l|is and a lipstick tribute scrawled on his coffin, a Navy sailor who died on a training mission was buried with full military hon ors. ■ Petty Officer 1st Class Robert Wayne Bordelon Jr., 39, was one of three sailors gkillt-d when an explosion and fire ripped through the USS Bonefish, one of the Na vy’s last non-nuclear submarines, during a training exercise in the Atlantic. Bordelon, a career sailor planning to re tire later this year after 20 years in the Navy, w r as buried Saturday at the Willis Cemetery, six days after the accident hap pened. When Lt. J.G. Michael Greenwood pre sented the U.S. flag that had been draped over the coffin to Bordelon's mother, Adell Burger, she held the flag to her chest and closed her eyes. Other family members placed ■ flowers and Hawaiian leis on the casket, while Linda Dell Devaney, Bordelon’s half-sister, scrawled in lipstick on the coffin “I love you, Bobby. 4ever.” The Navy has released few details of the accident, but the Washington Post in its Sat urday editions reported that the Navy is in vestigating eyewitness accounts that a fire broke out in the crew quarters shortly be fore the first explosion. The newspaper, quoting Pentagon sources, said a leak developed in a valve of a garbage disposal while some crewmen were pumping garbage overboard and salt water began pouring into the battery room below, where the explosion occurred. A Navy spokesman would not comment on the report. Twenty-two sailors among the 92 crew men aboard were injured in the accident. The bodies of Bordelon and the two other sailors killed were recovered Wednesday, but the cause of death was not released. A Ji&AH; irn JSS ■ bv the It ed for Di: ;sig)a,an<|p ;ed to do hat they no; officials uim not cooper;. ist, Ditto fc i and could! o see ho* 40 years copy, Gamti d the ascend ehind thear ig murals.( oodcarvini union table group of f f the 700-J ed in 194f! by the pri» soldiers * I INY ADS. BUT REAL HEAVYWEIGHTS WHEN RESULTS REALLY COUNT. o matter what you've go to say or sell, our Classi fieds can help you do the big job. Battalion Idassified 845-2611 Dad was right. 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