Curbs on Universal Lifted by Regulators; Chairman Replaced

Universal Savings Bank in Orange, the Australian-owned institution that was seized briefly by state regulators last year, said Friday that the Federal Home Loan Bank Board has lifted restrictions on the thrift’s operations.

In addition, Universal has selected U.S. businessman Lawrence Grill to replace Chairman Christopher Blaxland, an Australian who won a court battle against the state regulators last year. Blaxland said he remains an executive director of Unity Corp. Ltd., Universal’s holding corporation, in Sydney, Australia.

State regulators seized control of Universal last June 16 after two of its executives claimed that the S & L planned to illegally transfer a total of $10 million in loans overseas for the benefit of Unity’s chairman, Garry Carter. The takeover by the California Department of Savings and Loan was unique because the S & L was a healthy institution.

Won Court Ruling

Three weeks later, Universal won an unprecedented court ruling overturning the state’s action and putting the S & L’s control back in the hands of Unity.

At the time of the court hearings, Universal officials confirmed that the Federal Home Loan Bank Board had issued a cease-and-desist order that prohibited the thrift from making loans in excess of $500,000 without approval of the bank board. The thrift said most of its real estate loans range from $250,000 to $10 million.

The order, issued June 18, also prohibited Universal from selling any of its loans in the secondary loan market. The order included “a supervisory agreement” that gave the bank board some supervisory powers, according to Rivian Bell, a Universal spokeswoman.

The bank board refused in June, and again on Friday, to confirm or deny the existence of the cease-and-desist order, saying that all such orders are confidential.

In June, Universal officials declined to reveal the specifics of the cease-and-desist order. On Friday, Bell disclosed some terms of the order, but declined to discuss Blaxland’s departure.

Declined Comment

Blaxland, reached at his home in Torrance, also declined comment on his departure.

An industry source said the bank board might have required Blaxland’s dismissal as a condition in removing the cease-and-desist and supervisory order.

“They probably wanted to limit Unity’s power on the board,” said the source, who asked not to be identified.

Blaxland’s departure leaves three members on the S & L board. They are Grill, who was appointed to the board in January; George C. Hale, who became the institution’s president in August, and Carter, who is now Unity’s only representative on the board.

Cathy Toth, a member of the legal department of the Federal Home Loan Bank of San Francisco, declined to discuss the Universal case.

Grill, 51, a former vice president of Wickes Cos., has served on the boards of several thrifts that have been taken over by the bank board’s management consignment program, including North America Savings & Loan in Santa Ana.

In a prepared statement, Grill said Universal has shown that its operations are healthy. But the thrift declined to release financial results.

“Now we can proceed with normal lending operations unimpeded by additional regulatory controls,” Grill said.

Universal, which has nine branches in Orange and Los Angeles counties, had assets of $225 million on Dec. 31. The thrift sold more than $100 million in mortgage loans last year.