FBI Asked to Join Probe of Failed Consolidated S

The Federal Bureau of Investigation said Friday that it has been asked to join a probe into the collapse of Consolidated Savings Bank in Irvine.

FBI agents were part of a team that helped state and federal regulators take over the small savings and loan institution Thursday afternoon. But Fred Reagan, special agent and spokesman for the FBI’s office in Los Angeles, said: “I would hesitate to call it an investigation. It’s more an inquiry to determine the validity of the allegations made by the Federal Home Loan Bank Board.”

The bank board, which regulates savings institutions insured by the Federal Savings and Loan Insurance Corp., said Consolidated was violating federal regulatory laws by making large insider loans, going over its lending limit for a single borrower and failing to get adequate appraisals.

The regulatory body claimed that Consolidated was dissipating its assets of $84.3 million and its year-end earnings of $2.6 million, and it turned over operation of the 2-year-old institution to a management team from Household Bank, a Newport Beach-based S&L.;

The bank board reportedly sought help from the Justice Department for an investigation into Consolidated’s problems. The department sent the FBI to the scene.

Consolidated was the 16th S&L; in the nation, the sixth in the state and the second in Orange County to be taken over by regulators this year. American Diversified Savings Bank in Costa Mesa was taken over on Feb. 14.