FINANCE : Settlement Hikes to $1.5 Billion the Cost to Taxpayers of Beverly Hills Savings
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The settlement of a government IOU last week brought the total taxpayer cost of covering the losses at Beverly Hills Savings & Loan to $1.5 billion, making it one of the more expensive thrift failures in the nation.
The costs included an $811.5-million note that the government paid off with interest last week to make up the difference between the thrift’s debts at the time of the sale in 1988 and its loans and other assets.
The rest of the expense was attributed to the government’s agreement to cover losses on the sales of bad loans, sour investments, property seized in foreclosure and other money-losing assets.
Regulators had sold the S & L, which had moved its headquarters to Mission Viejo before its 1985 collapse, to Michigan National Corp. The Detroit-area banking company renamed it Independence One Bank of California and planned to convert it to a commercial bank. But the company said earlier this week that it will instead sell the now-healthy thrift within six months.
The nation’s most expensive thrift failures are American Savings & Loan and Lincoln Savings & Loan, both defunct Irvine institutions that are expected to cost taxpayers $5.4 billion and $3.4 billion, respectively.
Independence One has been one of the county’s healthier thrifts with $645.7 million in loans and other assets and $1.9 million in earnings for the first six months of this year.
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