Postmaster General Anthony M. Frank is considering returning to the thrift industry, possibly as a top federal regulator or leading the merger of several big, troubled California savings and loan associations, government and industry sources said Wednesday.
Frank, who ran First Nationwide Savings & Loan in San Francisco, has been talking with S&L; executives, government officials and others about ways to combine private capital with government aid to bolster the industry.
But industry executives are wary about Frank’s chances for success, adding that regulators might not welcome him back into the industry with open arms given his uneven record as chief executive of First Nationwide.
Frank has also been exploring other possibilities, including an interest in a new job under discussion as super-regulator for the government cleanup of defunct S&Ls.;
Frank’s interest in the S&L; business was emphasized recently when he testified before a Senate Banking Committee exploring the problems of cleaning up defunct S&Ls.; Frank called for the appointment of a czar, an executive with broad powers to oversee the disposal of the assets of defunct S&Ls; and has indicated he would be interested in such a job.
He met this week with Federal Deposit Insurance Corp. Chairman L. William Seidman, the architect of the current S&L; cleanup. Seidman has told Congress that the cleanup effort needs a well-known executive with broad financial experience.
Frank also was a serious candidate for the chief executive’s job at ailing San Diego-based HomeFed Inc. The post was filled this week when turnaround specialist Thomas J. Wageman was hired.
As head of the U.S. Postal Service since March, 1988, Frank has the longest tenure of any postmaster general who was not a career employee during the 20 years since the Postal Service became an independent operation. He has directed a major automation program and has worked through a full three-year cycle of rate increases and labor contracts.
Frank was not available for comment Wednesday.
But a spokesman, Frank P. Brennan Jr., said Frank’s proposal for thrift mergers was “strictly conceptual in nature. There are no specific discussions under way.”
Frank raised the idea of thrift mergers about a month ago in a meeting with Timothy Ryan, director of the Office of Thrift Supervision, which regulates the S&L; industry. “He raised the point of merging institutions in California, and even beyond California,” Ryan said Wednesday. “I viewed it as an interesting discussion, not a proposal.”
Ryan is developing plans under which the government would provide some funds to encourage mergers of ailing S&Ls; if private investors put in significant amounts of capital.
Frank has held discussions with Kohlberg Kravis Roberts & Co., a firm involved in leveraged buyouts and takeovers, about providing capital for investment.
Specific California thrifts that might merge weren’t mentioned. But several major California thrifts are struggling to meet federal capital rules, among them Glendale Federal, California Federal, Coast Federal and Home Federal.
Frank has mentioned his merger idea during informal discussions with executives at various thrifts, but industry sources expressed strong skepticism about the plan’s prospects.
One of the biggest roadblocks is that regulators probably would be cool to arranging such a merger deal with Frank, despite his longtime role as an industry statesman.
Earnings at the San Francisco thrift, now owned by Ford Motor Co., were lackluster during Frank’s tenure. Many of the problems at First Nationwide faced by Ford, which has pumped $1.5 billion into the thrift since 1985, stem from a nationwide expansion led by Frank. Critics says the growth of the S&L; was haphazard.
Industry sources said that, as a result, any Frank-arranged deal might be hard-pressed to win approval. Industry executives also noted that shareholders of thrifts that have not failed would resist a merger plan with government intervention that could dilute or wipe out their interests.
Robert Rosenblatt reported from Washington and James Bates from Los Angeles.
Bio: Anthony M. Frank
Frank, the U.S. postmaster general, is trying to put together a plan to combine troubled California savings and loan associations into a new thrift.
Born: Berlin, Germany
Education: Received an MBA from Dartmouth College in 1954, followed by postgraduate work in finance at the University of Vienna.
Family: Frank and wife Gay have two grown children: a daughter, Tracy, and son, Randall. Gay leads adventure excursions. Frank and his parents, both of whom held doctoral degrees in economics, fled to the United States from Nazi Germany in 1937.
Resume: After 30 years in the savings and loan industry, Frank took early retirement as chief executive of First Nationwide Bank to become the nation’s 69th postmaster general in 1988. In 16 years, he transformed Citizens Savings, which had only $400 million in assets, into First Nationwide, one of the nation’s largest thrifts. A Democrat who grew up in Southern California, Frank has served as a trustee of the American Conservatory Theater, on the financial advisory board of San Francisco’s Zen Center as well as the board of Dartmouth College’s Amos Tuck School of Business Administration.
Business philosophy: In a candid moment at a social event, Frank said he decided to try for the postmaster general job because he’d made all the money he would ever want to spend and relished the huge managerial challenge of running the U.S. Postal Service, the largest civilian employer in the world.
Quote: “The courtesy this nation gave to my family and myself when we arrived from Nazi Germany in 1937 is not forgotten, and I would like to return some of that.”