SAN FRANCISCO - Federal regulators are turning up the heat on California's slumping banks.

In the past year, examiners have slapped an unusually high number of community banks with stiff enforcement actions, bankers and industry watchers said.

At the same time, regulators confirmed that they are giving out lower marks more frequently on their examinations.

What's more, banks are no longer being pressed just on standard concerns, such as loan quality capital, but also on internal policies and procedures, and community lending practices.

"The regulators are losing their patience," said Salvatore Serrantino, a Santa Monica banking consultant.

The reason is plain: California's commercial real estate market and its overall economy are among the weakest in the nation. While many other areas are recovering, the Golden State is still headed downhill.

As a result, California banks are worse off than their counterparts in other regions, and worried regulators are drawing a bead on the state.

The crackdown is being criticized as excessive in some quarters. Bankers in the state said that enforcement measures once reserved for mismanaged or undercapitalized institutions have become the norm, even for banks whose balance sheets remain strong.

Harassment, Hostility Claimed

"Many people feel the regulators are being pushed to get as many banks as possible under as many orders as possible," said First Indo-American Bank chief executive Robb Evans, a member of the California Bankers Association executive committee.

Said Fred D. Jensen, past president of the California Bankers Association and director of the Long Beach Local Development Corp.: "The process has become harassing and hostile. It's lost its middle ground."

Regulators maintain that the supervisory pressure simply reflects California's troubled banking climate. "Conditions are deteriorating" said an official at the Office of the Comptroller of the Currency.

And some observers support that, saying California bankers are blaming regulators for their own mistakes.

Stepped up enforcement "is not an overreaction on the part of regulators," contended Mr. Serrantino. It reflects "laxity on the part of chief executives."

Harshness in the Golden State

Actions against banks are up across the nation. The Comptroller's Office, for example, completed 446 administrative actions in 1991, more than twice as many as 1988 and 15% more than 1990, the agency has disclosed.

But while separate figures for California are not available, the Golden State appears to be drawing a disproportionate share of supervisory attention, just as troubled New England did two years ago and the Southwest before that.

Examiners have slapped as many as one-third to one-half of the California community banks they reviewed in the past year with tougher actions, an exceptionally high proportion, according to observers.

The measures range from moderately severe memorandums of understanding to harsh cease-and-desist orders. Less stern actions, such as supervisory letters, are even more widespread.

A Deepening Downturn

The number of California banks receiving the three lowest marks in the five-grade Camel rating system is also rising, regulators said.

The proportion of enforcement actions is highest in hard-pressed Southern California, where a deepening downturn has pushed some banks to the wall.

The Comptroller's Office recently forced California United Bank in Encino to sign a formal agreement covering lending, capital, loan-loss reserves, liquidity, and other matters.

While the bank lost money in 1991 and its problem loans soared, its capital is well above regulatory requirements.

As far as enforcement is concerned, "virtually everyone is in the same boat we're in," said Stephen G. Carpenter, chief executive of California United.

He estimated that 70% of Southern California community banks have been hit with memorandums of understanding or more severe measures.

In response to pressure from Congress, regulators are also taking tougher action on such compliance issues as consumer protection and the 1977 Community Reinvestment Act's mandate for lending in low-income neighborhoods.

For example, the Federal Reserve Bank of San Francisco hit Farmers and Merchants Bank of Long Beach in March with a cease-and-desist order requiring the bank to comply with 10 consumer protection rules and the Community Reinvestment Act.

The Long Beach bank said any violations were technical or the result of internal errors.

With California banking conditions still worsening, regulatory pressure figures to increase.

"You're going to see more [enforcement actions]," predicts William J. Stolte, former chief of the Comptroller's western district office now working as a San Francisco-based consultant with the Secura Group.

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