Word: ls
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Dates: during 1980-1989
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...staggering cost of correcting the situation came into sharp focus last week, when the Federal Home Loan Bank Board, which regulates thrift institutions, announced a two-part bailout of 20 Texas S and Ls that could ultimately cost the Government $6.8 billion. First, the Bank Board conducted a fire sale of twelve failing Texas institutions, including Richardson Savings (assets: $707.8 million) and Mercury Savings ($332.9 million). The S and Ls will be merged and turned over to an investment group led by William Gibson, an executive vice president at Chicago's Continental Illinois bank, for a token $48 million...
...real shocker came a day later, when the Bank Board announced the largest rescue in its history. It plans to merge eight nearly moribund Texas S and Ls -- including Dallas' Sunbelt Savings, which lost $1.2 billion in the first three months of 1988 alone -- into one financial organization with assets of $6.9 billion. The Government will provide $2.5 billion of aid initially and possibly as much as $5.5 billion over the next ten years. Although the Bank Board had several offers to buy all eight S and Ls, it determined they were in such bad financial and legal shape that...
...early 1980s. But the problem is by no means restricted to those states. A report issued in January by the Comptroller of the Currency found that in 35% of the 189 U.S. bank failures from 1979 to 1987, fraud or insider abuse was "a significant factor." Among S and Ls, the malfeasance is even more pervasive. In testimony before Congress last year, representatives of the five U.S. bank-regulating agencies described an "epidemic" of fraud that had figured in as many as half the S and L failures since...
...prosecutors say they have uncovered a pattern of misdeeds spurred by greed. "People got into the J.R. Ewing syndrome," says Henry Oncken, the U.S. Attorney in Houston. "The more they made, the more they got caught up in making more." Some S and Ls that believe they were plundered by their officers are taking them to court. Dallas-based Sunbelt Savings Association is suing former Chairman Edwin McBirney III and other ex-managers for $630 million. The suit alleges in part that McBirney paid "excessive commissions and fees" to friends and relatives. In one instance, McBirney is accused of allowing...
Federal regulators said last week that liquidations will remain a last resort in resolving the industry's widespread insolvencies. Of 3,100 federally insured thrifts, some 200 are considered hopelessly insolvent. The FSLIC's liability for these S and Ls now significantly exceeds its assets on hand, so that the fund posted a deficit of $13.7 billion at the end of 1987, contrasted with $6.3 billion the previous year. But the FSLIC aims to narrow that gap over the next few years, relying on income from premiums and other sources. The FSLIC estimates that it will have $20 billion available...