FHLBB’s Handling of FCA Under Inquiry

Rep. Fernand J. St Germain (D-R.I.), chairman of the House Banking, Finance and Urban Affairs Committee, said Friday he is beginning an inquiry into the way the Federal Home Loan Bank Board has handled the problems of ailing Financial Corp. of America.

The probe follows a request by FCA, which lost $468 million in 1987, for a $1.5-billion loan assistance package from the Federal Savings and Loan Insurance Corp., an arm of the bank board. The board has been trying for nearly a year to find new capital for Irvine-based FCA and its operating subsidiary, American Savings & Loan.

The FCA inquiry is part of the committee’s larger look into the bank board’s “growing caseload of ailing thrifts,” St Germain said in a statement, adding that the “policies and procedures of the bank board have been shrouded in secrecy.”

A spokesman for the bank board declined to comment. FCA Chairman William J. Popejoy said: “We will cooperate with whatever official requests are made of us.”