Federal thrift regulators are taking away some special accounting sweeteners they gave investors as incentives to buy troubled savings and loans in 1988. The move could hinder the growth plans of at least one major California thrift, American Savings.
Last week's ruling, which comes as regulators are trying to force thrift owners to put more of their own money at risk, is likely to trigger lawsuits by investors angry that the government is reneging on its deals. In addition, the new rules probably will leave some institutions close to insolvency.
The new rules disallow thrifts from counting certain things as part of their capital, which is the financial cushion that thrifts must maintain to protect against losses. Most affected in California by the order is American Savings, the former Financial Corp. of America unit that was bought in December, 1988, by a group led by wealthy Texas investor Robert M. Bass.
A spokesman for the Stockton-based thrift said that about $300 million in capital is wiped out by the new rules, although he added that American will still meet all of the tough new federal standards for capital. He said executives there are concerned about the new order but added that no decision has been made on responding to it.
The main effect for American is that it will need more capital than is required if it wants to grow and acquire other thrifts. American was one of about a dozen groups expressing early interest in acquiring Gibraltar Savings, a large Simi Valley thrift run under government supervision. It could not be determined Monday if American is still interested.
In 1988, regulators made a number of deals that offered investors more liberal capital standards, tax breaks and a guaranteed return on some assets. Members of Congress have criticized those deals, saying they were too generous.
Investors affected include those who bought 87 sick thrifts in Texas in 1988, among them investor Ronald O. Perelman's MacAndrews & Forbes Holdings.
Gerald L. Parsky, a partner with former Treasury Secretary William E. Simon in the similar purchases of two Southern California thrifts--Western Federal Savings and Southern California Savings--said those institutions are unaffected by last week's ruling.