S&L; Shutting Down Tustin Office to Meet New Rules

In an effort to help cut costs and improve its finances to meet the new federal capital standards that took effect Thursday, Constitution Federal Savings & Loan said it will shut down its Tustin office on Jan. 1.

The small thrift is one of several Orange County S&Ls; scrambling to meet the tougher new rules that require thrifts to maintain the same 3% capital-to-assets ratio as banks. Continental also said it recently moved its headquarters from Tustin to Monterey Park,

At least two of those S&Ls;, FarWest in Newport Beach, with $4.7 billion in assets, and Huntington Beach-based Mercury, with $2.3 billion in assets, previously had said they would not meet the new capital standards in time.

The two are preparing formal plans for increasing their capital--by reducing assets as Constitution is doing, finding new investors or by some combination of those things. Mercury, in fact, has said that it must find a buyer to infuse needed capital.

Two other smaller county-based thrifts, Charter Savings Bank in Newport Beach and Huntington S&L; in Huntington Beach, were not expected to be able to meet the new requirements. But officials at the two S&Ls; could not be reached Thursday for comment on their institutions’ capital standings.

A sixth thrift, tiny Delta Savings in Westminster, said Thursday that it has cut assets and raised additional capital and is in compliance with the new federal rules.

When the rules were first announced early last month, top federal thrift industry regulators said that about 800 of the nation’s 2,700 thrifts would not meet Thursday’s deadline and that as many as 300 of them would be put out of business by the end of the year.

Since then, regulators have seized one Orange County thrift, Security Federal S&L; in Garden Grove, declared it insolvent and placed it in the federal conservatorship program.