Regulators have ordered a $14 million-asset mutual thrift in Pittsburgh to raise capital, citing improper automated clearing house transactions that resulted in large losses.
Though mutuals typically are restricted from selling themselves, the Office of Thrift Supervision told the critically undercapitalized Dwelling House Savings and Loan Association that it must consider all options for bolstering capital, including a rare supervisory conversion that would enable a sale.
In its May 5 prompt corrective action directive, the OTS gave Dwelling House two days to submit a plan demonstrating that it can achieve adequately capitalized status by June 30.
The OTS said Dwelling House also must comply with a Feb. 10 letter spelling out steps it must take to address the improper ACH transactions responsible for depleting its capital. In addition, the agency advised Dwelling House to pursue legal action to recover those losses.
The first-quarter results for Dwelling House were not available last week. The thrift was well capitalized at yearend, but its capital ratios fell to roughly a third of what they had been a year earlier, according to data from the Federal Deposit Insurance Corp.
Dwelling House swung to a $2.6 million loss last year, from a $27,000 profit in 2007.