Court Upholds U.S. Thrift Office’s Power Over S

A federal appeals court in Washington granted an emergency order Friday upholding the federal government’s power to regulate the savings and loan industry.

A U.S. District Court judge had blocked the impending seizure of Olympic Federal Savings & Loan of Berwyn, Ill., on grounds that the government’s former chief S&L; regulator was not constitutionally confirmed by the Senate. The decision raised potential challenges to the government seizure of dozens of ailing S&Ls.;

The circuit court of appeals issued a stay of the U.S. District Court judge’s order until April 11, saying the government cannot liquidate Olympic’s assets or sell the S&L.; The authority of the government to deal with other S&Ls; remains unaltered.

The appeals court indicated, however, that Olympic Federal could still prevail in the case, and it said it would hear further arguments April 11.

The federal Office of Thrift Supervision said it was pleased with the court’s decision and said it was confident it would ultimately prevail in the case.

“We are gratified that the court recognized the need for us to continue our regulatory and supervisory operations to ensure the safety and soundness of the thrift industry,” OTS acting chief counsel Eugene M. Katz said.