Federal Board Approves Rockford S&L Acquisition
WASHINGTON (AP) _ The Federal Home Loan Bank Board announced Wednesday that Loves Park FSB of Loves Park, Ill., has been acquired by Home Federal Savings and Loan Association of Rockford, the 106th insolvent thrift case to be settled this year.
Home Federal of Rockford made the Loves Park acqusition with $4.9 million in cash assistance from the Federal Savings and Loan Insurance Corp., the bank board said in a statement.
Despositors will continue to have immediate access to all their accounts, which remain insured by FSLIC, the bank board said.
The Federal Home Loan Bank Board placed Loves Park into receivership and transferred substantially all its assets and liabilities to Home Federal.
In addition to the cash assistance, FSLIC will indemnify Home Federal against any unreserved for claims or litigation challenging the transaction, the statement said.
The insolvency of Loves Park stemmed from losses resulting from its high cost of funds and high level of non-earning assets.
Before the acquisition, Loves Park was a federal stock institution with assets of $42.4 million and liabilities of $45.6 million, the statement said.
Home Federal, with $343 in million in assets, is a federally chartered mutual association that operates eight branch offices within the Rockford area.
The announcement came the same day as the chairman of the Senate Banking Committee contended that taxpayers would have to chip in at least $20 billion to bail out the savings and loan industry.
In a speech prepared for delivery on the Senate floor, Sen. William Proximre, D-Wis., noted that money spent by FSLIC, which guarantees deposits of up to $100,000 at federally-chartered thrifts, is provided by the industry.
But Proxmire said it is his ″reluctant but profound conviction″ that the problem had grown beyond the industry’s ability to handle it.
″The cost of the S&L bailout will top the combined cost of all previous federal bailout in history,″ Proxmire said.
The Federal Home Loan Bank Board, which regulates the country’s 3,000 S&Ls, estimates the total cost of closing or merging insolvent institutions at $31 billion, within its 10-year revenue projection of $42 billion. But the board is expected to announce a new estimate after the end of the fiscal year Sept. 30.