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S&L Probers Want to Hear Keating

September 28, 1989|JAMES S. GRANELLI | Times Staff Writer

Charles H. Keating Jr. and top regulators who seized his Lincoln Savings & Loan in April have been called to testify before a House banking committee that is investigating the collapse of the Irvine institution.

The Committee on Banking, Finance and Urban Affairs will hear four days of testimony from a wide range of witnesses over a four-week period starting Oct. 17.

The committee chairman, Rep. Henry B. Gonzalez (D-Texas), has called Lincoln's failure a "mini-Watergate in federal financial regulation" and has promised to examine in detail the S&L's financial condition, the performance of its managers, the role of its accountants and other professionals, and the bitter relationship between Lincoln and its regulators.

Regulators seized Lincoln on April 14, a day after its parent, American Continental Corp. in Phoenix, filed for bankruptcy. The S&L, since declared insolvent and put in receivership, is estimated to be the costliest thrift cleanup ever with a taxpayer bill approaching $2.5 billion.

Some industry analysts think the Gonzalez hearing will "beat up" on M. Danny Wall, former chairman of the Federal Home Loan Bank Board and now director of its successor agency, the Office of Thrift Supervision.

Wall has been criticized for the bank board's unprecedented decisions in the spring of 1988 to toss out the results of a two-year regulatory examination of Lincoln's financial condition, start a new one and remove supervision of the S&L from federal regulators in San Francisco.

It could not be determined Wednesday whether Keating, chairman of American Continental, would show up to answer questions. Keating could not be reached and a company spokesman declined comment.

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