Countrywide Receives S&L Approval

CALABASAS, Calif.–Countrywide Financial Corp. has received approval to become a savings-and-loan holding company, placing all operations under the supervision of a single federal regulator. The nation’s largest mortgage lender said the move was a cost-cutting measure. According to federal savings-and-loan regulators, Countrywide will now convert its Alexandria, Va.-based bank subsidiary to a federal savings bank. Before, Countrywide reported to two separate government agencies: the Federal Reserve Board and the Office of the Comptroller of the Currency. The move was approved because of Countrywide’s promise to make mortgage loans and provide credit consistent with the “safe and sound operations” of a savings and loan, said regulators. On Dec. 5 the company reached an agreement with New York Attorney General (now Governor) Elliot Spitzer to put measures in place to prevent discriminatory pricing to minorities. As part of that deal, Countrywide will compensate minority borrowers who were improperly steered toward higher-cost loans and initiate a $3 million consumer education program.