American Savings and Loan

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American Savings and Loan Association
Company type
Mortgages

American Savings and Loan Association was an American

savings and loan based in Stockton, California. In 1988 it was the largest thrift failure and the federal government's costliest resolution during the savings and loan crisis at an estimated cost of $5.4 billion.[1]

History

The thrift was founded in 1922 as State Savings & Loan Association in Stockton.

mortgage-backed securities. which were subject to price volatility as interest rates changed.[4]

A $468 million loss in 1987 left the thrift technically insolvent.[5] American Savings was placed in receivership in September 1988.[6] FCA filed for chapter 11 bankruptcy the next day. (In February 1989, it was changed to a chapter 7 liquidation.) The thrift was split into a good bank and bad bank, with New West Federal Savings bank as the bad bank. At the time it had $30 billion in assets and was one of the largest thrifts in the United States.[citation needed]

The Robert M. Bass Group, Inc. of Fort Worth, headed by

JP Morgan Chase Bank
.

Charles Knapp was convicted in 1993 of fraud, although it was not related to American Savings. His company, Trafalgar Holdings Ltd., obtained a $15 million loan from Western Savings and Loan in Phoenix, Arizona, using fraudulent financial information. He was sentenced to 6+1⁄2 years in prison.[9]

References

  1. ^ "New Figures Rank Collapse of American S&L; as Costliest Ever : Banking: Regulators now say it will cost taxpayers $5.4 billion. Bass reportedly plans to sell successor American Savings". Los Angeles Times. 1994-05-20. Retrieved 2021-06-08.
  2. ^ a b c Bill Cook (July 23, 1996). "Stockton thrifts wild ride". The Record.
  3. ISSN 0362-4331
    . Retrieved 2021-06-08.
  4. ^ "Despite Ongoing Woes, FCA's Chief Is Firmly in Charge". Los Angeles Times. 1988-02-08. Retrieved 2021-06-08.
  5. ^ "THE SALE OF AMERICAN SAVINGS : Chronology of a Troubled Thrift : More Than Five Years After FCA and American Savings Met, They Drift Apart, Battle-Scared and Suffering Loses". Los Angeles Times. 1988-09-06. Retrieved 2021-06-08.
  6. ISSN 0362-4331
    . Retrieved 2021-06-08.
  7. ISSN 0362-4331
    . Retrieved 2021-06-08.
  8. ^ "Valley Federal Reported Close to Being Sold : Thrifts: Sources say American Savings Bank could take over the ailing S&L;'s deposits and 22 branch offices as early as this week". Los Angeles Times. 1992-04-08. Retrieved 2021-06-08.
  9. ^ "Knapp Gets 6 1/2 Years for S&L; Fraud : Thrifts: The once high-flying chief of American Savings is also ordered to pay $11 million in restitution". Los Angeles Times. 1993-12-15. Retrieved 2021-06-08.

Further reading

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