SANCHEZ: A fairly long time.
GLENN: How many loans have gone belly-up?
SANCHEZ: We don’t know at this point how many of the 52 have defaulted. These loans generally have interest reserves.
GLENN: Well, the interest reserves should run out on many of these.
CIRONA: These are longer term investments.
BLACK: I know that Lincoln has refinanced some of these loans.
GLENN: Some people don’t do the kind of underwriting you want. Is their judgment good?
PATRIARCA: That approach might be okay if they were doing it with their own money. They aren’t; they’re using federally insured deposits.
RIEGLE: Where’s the smoking gun? Where are the losses?
DECONCINI: What’s wrong with this if they’re willing to clean up their act?
CIRONA: This is a ticking time bomb.
SANCHEZ: I had another case which reported strong earnings in 198%. It was insolvent in 1985.
RIEGLE: These people saved a failing thrift. ACC is reputed to be highly competent.
BLACK: Lincoln was not a failing thrift when ACC acquired it. It met its net worth requirement. It had returned to profitability before it was acquired. It had one of the lowest rations of scheduled assets in the 11th District, the area under our jurisdiction. Its losses were caused by an interest spread problem from high interest rates. It, as with most other California thrifts, would have become profitable as interest rates fall.
DECONCINI: I don’t know how you can’t consider it a success story. It lost $24 million in 1982 and 1983. After it was acquired by ACC it made $49 million in one year.
McCAIN: I haven’t gotten an answer to my question about why the exam took so long.
GLENN: How many loans have gone belly-up?
SANCHEZ: We don’t know at this point how many of the 52 have defaulted. These loans generally have interest reserves.
GLENN: Well, the interest reserves should run out on many of these.
BLACK: I know that Lincoln has refinanced some of these loans.
GLENN: Some people don’t do the kind of underwriting you want. Is their judgment good?
PATRIARCA: That approach might be okay if they were doing it with their own money. They aren’t; they’re using federally insured deposits.
RIEGLE: Where’s the smoking gun? Where are the losses?
DECONCINI: What’s wrong with this if they’re willing to clean up their act?
CIRONA: This is a ticking time bomb.
SANCHEZ: I had another case which reported strong earnings in 198%. It was insolvent in 1985.
RIEGLE: These people saved a failing thrift. ACC is reputed to be highly competent.
BLACK: Lincoln was not a failing thrift when ACC acquired it. It met its net worth requirement. It had returned to profitability before it was acquired. It had one of the lowest rations of scheduled assets in the 11th District, the area under our jurisdiction. Its losses were caused by an interest spread problem from high interest rates. It, as with most other California thrifts, would have become profitable as interest rates fall.
DECONCINI: I don’t know how you can’t consider it a success story. It lost $24 million in 1982 and 1983. After it was acquired by ACC it made $49 million in one year.
McCAIN: I haven’t gotten an answer to my question about why the exam took so long.
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