- The Washington Times - Monday, March 7, 2005


The Supreme Court refused yesterday to clarify how much the government should pay savings and loan associations who say they lost billions after Congress abruptly changed accounting rules to bail out the industry.

Justices declined to review a $381 million judgment to Glendale Federal Savings, a former Southern California thrift that is now part of Citigroup Inc.

Glendale appealed the ruling from the U.S. Court of Appeals for the Federal Circuit, saying it is entitled to additional damages.

The Justice Department filed a cross-claim, arguing that the award should be lowered.

Glendale agreed to take over a troubled Florida savings and loan, First Federal Savings, after regulators offered accounting breaks to savings and loan associations as an incentive to take over financially troubled ones.

By agreeing to make the purchase, the thrifts helped the government avoid reimbursing account holders under a deposit insurance program. But in 1989, Congress passed new rules that eliminated the accounting breaks.

The Supreme Court has previously ruled that the government had breached its agreement to savings and loan associations who relied on receiving breaks.

Glendale’s case offered a chance to clarify the amount of damages for dozens of thrifts who say they lost billions in damages, an opportunity justices declined yesterday.

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