P. M. BRIEFING : Regulators Seize Kansas Thrift
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WASHINGTON — Federal regulators today seized Franklin Savings Assn. of Ottawa, Kan., the largest thrift in the state, charging it with dissipating its assets.
The Resolution Trust Corp. said the thrift, with $11.4 billion in assets, will operate under government control. Franklin was the 21st largest thrift in the nation at the end of September.
Regulators stressed that all nine Franklin branches remain open for business, and all deposit accounts are protected up to the $100,000 insurance limit.
Franklin specialized in a complex financial strategy in which it accepted high-rate deposits from Wall Street brokers and invested them in mortgage-backed securities, using futures contracts to protect itself from swings in interest rates.
Franklin was not technically insolvent, but it was seized under a provision of the S&L; law enacted last August which permits regulators to step in to prevent an institution from dissipating its assets or engaging in unsafe and unsound practices, thrift office spokesman William Fulwider said.
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