FDIC APPROVES THE ASSUMPTION OF THE INSURED DEPOSITS OF UNION FEDERAL BANK, FSB, LOS ANGELES
FOR IMMEDIATE RELEASE PR-60-96 (8-9-96)
Media Contact: David Barr (202)898-6992
The Board of Directors of the Federal Deposit Insurance
Corporation approved the assumption of the insured deposits of
Union Federal Bank, FSB, Los Angeles, California, by Dean
Witter Trust FSB, Jersey City, New Jersey, a newly chartered
federal savings bank.
Union Federal, an institution insured by the FDIC's Savings
Association Insurance Fund (SAIF), was closed today by the
Office of Thrift Supervision. The FDIC was named receiver.
The failed institution's sole office will reopen as a branch
of Dean Witter Trust FSB on Monday, August 12, and its
depositors will automatically become depositors of the assuming
institution. Deposits at Dean Witter Trust FSB will be insured by
Dean Witter Trust FSB will assume $30.6 million in about
1,000 deposit accounts and will pay the FDIC a premium of $4.1
million for the right to receive the failed institution's insured
deposits and to purchase $2.7 million in assets. Union Federal had
total assets of $34.3 million.
At the time Union Federal was closed, about $2.1 million
in 72 accounts exceeded the federal insurance limit of $100,000
and will not be assumed. Depositors who believe they may have
uninsured deposits should arrange an appointment with an FDIC
claims agent at the failed bank's former office by calling
(213) 688-8555 before August 16. After that date, depositors
should contact the FDIC's Claims Department, P.O. Box 7549,
Newport Beach, CA 92658.
The FDIC notes that its claim on recoveries from the sale
of Union Federal's assets will have priority over non-depositor
creditors of the failed institution.
This transaction marks the first time that a SAIF-insured
institution has failed since the FDIC assumed responsibility for
troubled savings associations from the Resolution Trust
Corporation (RTC) on July 1, 1995. Union Federal is the fifth
FDIC-insured institution failure this year and the first in California
since Pacific Heritage Bank, Los Angeles, was closed on July 28,
The FDIC estimates the cost of this transaction to the SAIF
to be approximately $10.3 million.
Congress created the Federal Deposit Insurance Corporation in 1933 to
restore public confidence in the nation's banking system. The FDIC
insures deposit at the nation's 12,000 banks and savings associations
and it promotes the safety and soundness of these institutions by
identifying, monitoring and addressing risks to which they are exposed.
FDIC press releases and other information are available on the Internet
via the World Wide Web at www.fdic.gov or through Gopher at gopher.fdic.gov.