BANKING & FINANCE - Jan. 18, 1996

OTS Regulators Propose Change in Lending Rules: The proposals by the Office of Thrift Supervision would allow expansion of commercial lending by certain thrift subsidiaries and would relax some investment restrictions, but would not weaken major reforms passed by Congress in the 1980s. The stronger capital standards, which require thrifts to set aside more money against potential loan losses, remain intact. The agency said the proposal was the first major overhaul of OTS’ lending rules since the early 1980s, when the Reagan administration and Congress teamed up to aggressively cut thrift regulations, which led to the S&L; crisis that cost taxpayers about $90 billion to clean up. The Resolution Trust Corp., which was in charge of selling loans and other assets from the busted S&Ls;, was disbanded on Dec. 31.