S&l Associations Will Be Told How Feds Do Ratings

Article excerpt

WASHINGTON - Federal thrift regulators will soon begin telling savings and loan associations exactly how they rate in their examinations, the Federal Home Loan Bank Board said Thursday.

The change in policy was announced in Thrift Bulletin TB-8, issued this week by the Office of Regulatory Activities, which implements regulatory policy of the Federal Home Loan Bank Board.

Henceforth, the board said, savings institutions will be given their overall MACRO ratings after being examined.

The term "MACRO" represents five factors that examiners review to determine the composite rating: management, asset quality, capital adequacy, risk management and operating results and operating results.

Each factor is rated on a scale of one to five, according to the board. Those numbers are then combined for an overall one-to-five MACRO rating in which one is given to associations in the best condition, while a five is assigned to the most troubled institutions.

Until now, institutions were given a narrative report, but were not told their specific numerical MACRO rating assigned by examiners, the board said. …