P.M. BRIEFING : Federal Regulators Take Final Steps to Seize Control of Lincoln Savings
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Federal regulators took the final step today to seize complete control of Lincoln Savings & Loan Assn., a controversial Southern California thrift that is the center of lawsuits, investigations and scandal.
The Federal Home Loan Bank Board in San Francisco placed the Orange County thrift in receivership and severed ties with its parent company, American Continental Corp. of Phoenix.
Federal regulators said they moved to protect depositors’ assets because the Irvine-based thrift was insolvent to the tune of $631 million. When federal regulators placed the thrift in conservatorship in April, it was still solvent.
By placing the thrift in receivership, regulators severed the last of its ties with American Continental, which filed for bankruptcy one day before regulators took control in April. Under conservatorship, regulators managed the thrift but did not assume ownership.
The Federal Home Loan Bank Board created a new federal mutual association that will continue to operate Lincoln as before. Regulators said the receivership will not affect depositors in any way.
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