Founders S&L; in Receivership; Sale Now Likely
The federal government’s newly formed Resolution Trust Corp. said Thursday that it has been named receiver for Founders Savings & Loan in Los Angeles, one of the nation’s largest black-owned thrifts.
Federal officials could not be reached for comment, but the move was likely made to set up Founders to be sold or merged with another institution. The troubled savings and loan has been operating under federal supervision since regulators seized it in September, 1986, and replaced its management.
In putting Founders into receivership, the government transferred the assets, deposits, offices and liabilities of the thrift into a new federal institution and will change the name to Founders Federal Savings & Loan. The effect of that move is to wipe out claims of stockholders and debt holders.
As of June 30, Founders had $125.9 million in assets and $162.4 million in 16,670 deposit accounts. The RTC said Founders will keep operating under normal business hours, managed by agents appointed by the agency.
Books, Records in Disarray
As of Dec. 31, Founders was the nation’s fourth-largest black-owned thrift, behind Independence Federal Savings Bank in Washington, Carver Federal Savings Bank in New York and Family Savings & Loan in Los Angeles.
Regulators said at the time that Founders was seized that the thrift was suffering from bad commercial and construction loans and its books and records were in disarray.
The RTC was formed as part of the new federal savings and loan bailout signed into law by President Bush in August. The agency, which is run by the Federal Deposit Insurance Corp., has more than 263 other insolvent thrifts under its control. The RTC was named receiver by another new federal agency formed as part of the bailout, the Office of Thrift Supervision.
