Correction: 01/08/99 issue

A Jan. 8 story, "Calif. Thrift and Loan Faces FDIC Threat of Shutdown Over Risk Capital Shortfall," erroneously reported that the FDIC has threatened to shut down Pacific Thrift and Loan Co. within 90 days unless the Woodland Hills, Calif., institution made significant improvement. It also erroneously reported that the FDIC has forbidden the thrift and loan from making loans until its capital level has "risen to acceptable levels."

The FDIC issued a prompt corrective action directive against Pacific Thrift in November. However, institutions are not subject to closure by the chartering authority unless their tangible equity ratio falls below 2%. Pacific Thrift's capital is considerably above that level.

Under the directive, the thrift and loan is prohibited from making loan commitments unless it has adequate funding sources for those loans. As long as a funding source exists, the institution can make loans.