Monday, May 2,1988/The Battalion/Page 7
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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.
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