CalFed Wins S & L Claim Against U.S.

A federal judge in Washington ruled that the U.S. broke a contract with California Federal Bank, opening the way for more trials on savings and loan claims totaling as much as $30 billion in damages. U.S. Claims Court Chief Judge Loren Smith accepted CalFed’s argument that the government acted improperly by breaking an agreement to let the San Francisco-based thrift count part of the premiums from three acquisitions, called “supervisory goodwill,” as capital. In the 1980s, dozens of thrifts bought insolvent institutions based on the goodwill commitment of U.S. regulators. Separately, the government agreed to pay $41.5 million to Dollar Bank, a Cleveland-based mutual bank, to settle similar claims. Dollar said it lost $266 million in regulatory capital when Congress passed a 1989 law ordering a quick phaseout of supervisory goodwill.