Big thrifts get passing grade on mutual fund risk disclosure.

The nation's largest thrifts are generally doing a good job complying with consumer disclosure guidelines for investment products, a key regulator said.

John Robinson, director of the Office of Thrift Supervision's western region, said his staff recently examined the 14 largest thrifts in the district to see how well they were alerting consumers to the risks of mutual funds and other uninsured investments.

Office Closely Followed

He said he was "generally pleased" with the findings. While some thrifts are doing a better job than others, none were "blatantly failing to comply" with guidelines adopted by federal regulators in February, Mr. Robinson said.

The activities and opinions of the agency's western office are closely followed because the district includes many of the nation's largest thrifts. Nine of the 10 biggest thrifts in the country are based on the West Coast.

About 50 of the 150 thrifts regulated by the western region sell investment products. Most sell third-party funds. A handful have proprietary funds. These include Great Western, World Savings, Home Savings, and Washington Mutual Savings.

"I really wanted to get a handle in a hurry on the biggest and most prominent institutions out here because they are exposed to the most customers," Mr. Robinson said in a telephone interview.

Examiners found that the thrifts are disclosing the uninsured status of investment products through advertising and in disclosure statements signed by investors.

Had to Rely on Paper Trail

But it was harder to gauge through the exams whether the investments being sold are suitable to the investors, Mr. Robinson said.

Since the examiners were not mystery shopping, they had to rely on the paper trail of documents that showed whether salespeople are collecting enough information about investors, their investment goals, and the risk they are willing to assume. The thrifts that were examined did collect that information, he said.

That, along with a low level of complaints, suggests that these institutions are doing a "fair job" at selling investors suitable products, he said.

The region office has received fewer than 50 complaints in the last year.

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