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

DATE: TUESDAY, May 8, 1990                   TAG: 9005080343
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A2   EDITION: METRO 
SOURCE: Cox News Service
DATELINE: WASHINGTON                                LENGTH: Short

MONDAY S&L BAILOUT COST MORE THAN CHRYSLER'S

The government bailout of savings and loans speeded up Monday, as $1.4 billion in taxpayer funds was wired out to pay off the obligations of 14 more savings and loan institutions in seven states.

The wire transfers completed a process in which three government facsimile machines worked almost non-stop from 5 p.m. Friday to 2 a.m. Saturday sending out news releases to the hometowns of the 14 failed S&Ls covered by the latest wave of bailout announcements. It was Monday morning before an overall picture of what happened became available.

The cost of Monday's S&L bailout exceeded the total federal loan guarantees extended to Chrysler over two years in its much-publicized bailout of the early 1980s.

In the Chrysler case, the government aid allowed the auto maker to turn the corner to profitability, and eventually the Treasury made a profit of an estimated $330 million profit on the loan guarantees.

However, officials working on the S&L bailout said that, at best, only about half the $1.4 billion spent on Monday will ever be recovered.

This time, taxpayer money is spent upfront to save S&L depositors from loss, and the S&L vanishes as a business entity. The government takes over its remaining assets - including defaulted loans and risky bonds - and tries to sell them to offset payments to the depositors.

The wire transfers issued on Monday were part of "Operation Clean Sweep," a federal plan to close the books on 141 failed S&Ls by July 1, at a cost of more than $50 billion.

by CNB