Magazine article American Banker

Order Restricts Activity of Seattle's Westside S&L

Magazine article American Banker

Order Restricts Activity of Seattle's Westside S&L

Article excerpt

SEATTLE -- The Westside Federal Savings & Loan Association has disclosed that it is operating under a consent order from the Federal Home Loan Bank Board that restricts lending and requires development of written standards for commercial, corporate, and business loans.

The order prohibits Westside from making or maintaining loans in excess of "loan-to-one-borrower limits without Bank Board consent."

It also prohibits "further direct involvement in real estate without Bank Board approval" and requires the thrift to "develop and adhere to conflict-of-interest guidelines."

The order also requires Westside to "insure that loan documentation and appropriate appraisals are present prior to distributing funds" and "to disburse loans in compliance with federal regulations."

Additionally, Westside is required to "develop a written register of all commercial loans" and to "maintain total compensation at or below levels for comparably sized savings and loans."

The approval of directors is required for "loans or series of loans to one borrower exceeding $500,000."

The consent order will remain in effect until regulators approve an application to acquire Westside.

Harlington investment Group of Oklahoma City announced in February plans to infuse up to $10 million of new capital into Westside and to acquire control.

L. Tucker Link, a principal of Harlington and the president of Westside Federal, said in a statement: "We have already implemented many of the procedures called for by the Bank Board. This agreement provides the [Bank Board] with assurances they need and does not substantially restrict our operations.

"It also provides opportunities for regulatory waivers of loan-to-one-borrower resrictions, which will give us the flexibility to attempt to work out of our problem loans. …

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