The Office of Thrift Supervision has slapped several strict regulatory requirements on Bank Plus Corp. in the wake of a $60 million third-quarter loss and a significant reduction in capital levels.

The $3.8 billion-asset Bank Plus, the parent of Fidelity Federal Bank, has been struggling for several quarters with problems in a subprime credit card portfolio. It must now submit a plan to its regulator spelling out how it intends to return to health.

With its earnings report Thursday, the Los Angeles-based thrift said the supervision of its operations by the OTS will extend to strict monitoring of any plans to increase assets, approval of all new directors and executives, reviews of any new third-party contracts, and oversight of all transactions between the thrift and its affiliates.

Bank Plus' capital is now deemed merely "adequate" and is only $8.3 million above the level at which it would be considered undercapitalized. The business plan sought by the OTS must specify how Bank Plus would return to the "well-capitalized" category, which could include an increase in capital and/or a decrease in assets.

Only 2% of thrifts are other than well-capitalized, according to the OTS.

While Bank Plus' problems are somewhat unique-not many thrifts are involved in subprime lending-capital concerns could spread in the financial industry as the economy softens, observers said.

"In the booming economy these actions had been quite rare, but as we go into a downturn you are going to see more of them," said Ronald Glancz, an attorney in the financial institutions practice at the Washington law firm Venable, Baetjer, Howard & Civiletti.

Over the past few years, banks and thrifts have grown more thinly capitalized as shareholders pushed them to invest in acquisitions or stock buybacks, observers said.

The primary culprit in Bank Plus' poor performance was the subprime card portfolio, which had losses of $51.8 million in the third quarter.

Mark K. Mason, the company's new chief executive officer, said the prior management allowed the business to grow too quickly.

"It just expanded so fast that they didn't allow its performance to feed back to underwriting," Mr. Mason said in an interview Thursday. "They didn't have the time to make mistakes and correct them in midstream."

As part of Mr. Mason's plan for recovery, Bank Plus has severed its relationship with credit card marketer MMG Direct Inc., resulting in an $8.2 million writeoff of marketing fees because of "uncertainty regarding the collectibility of these amounts." The thrift also is winding down originations made through another credit card partner, American Direct Credit LLC.

Bank Plus is seeking to reduce its assets by lowering the amount it pays in interest on high balance deposit accounts.

The underperforming company also faces a 23-basis-point increase in its deposit insurance premiums, to 30 basis points, in 1999. That would be a big drag on earnings, Mr. Mason said.

But Bank Plus has experienced a rash of problems since the early 1990s.

Weighed down by poorly performing multifamily mortgages in the early part of the decade, the thrift failed to significantly improve its performance, even as the Southern California economy regained its health.

In August, Bank Plus reported a second-quarter loss of $1.2 million, resulting from losses in its mortgage-backed securities portfolio.

Investors began to clamor for the thrift's sale and a change of management. In September, Mr. Mason was named to succeed CEO Richard M. Greenwood, who resigned.

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