Although some Utah lawmakers have lingering doubts about the proposed $100 million settlement of depositors' claims in five failed thrifts, the Legislature should act swiftly in its one-day special session Wednesday to resolve the matter.
The issue has dragged on for two years. A deal worked out by Gov. Norm Bangerter, a legislative task force, and the 15,000 depositors - while leaving both sides less than fully satisfied - appears to be the best solution.The settlement, which would end a class action lawsuit by the depositors against the state, will provide $100 million to depositors, and envisions returning 100 percent of the depositors' money, through a combination of state funds, insurance, and lawsuits against third parties, such as former thrift industry officials.
Depositors hope this will bring enough to pay at least some of the legal fees incurred in the depositors' lawsuit. The state will not pay any interest on the depositors' money.
The deal will require some use of taxpayer funds, including a $33 million bond and a $9 million appropriation, plus $19 million from insurance carriers. Another $39 million in seized depositor funds has already been paid, or will be returned as part of the settlement.
Some legislators are unhappy about such use of state money. Others don't like seeing taxpayer resources possibly ending up indemnifying lawyers. Despite such hesitations, the best approach is to come up with the money and put the whole sorry episode to rest.
Because of a technicality, a two-thirds vote will be required in the Legislature to adopt the settlement. That technicality involves setting aside a 60-day waiting period for any matter reviewed by the Board of Examiners. The board, made up of the governor, attorney general, and auditor, must examine any claims made against the state.
There is no reason for the 60-day wait on this issue, although some legislators may try to use the need for a two-thirds vote to at least delay the deal until late October. But such maneuvering would serve no useful purpose.
The thrift settlement is inevitable, one way or another. Let's get it over and done with so people can get on with their lives and the bitterness engendered by this experience can begin to be erased.