Downey Financial Corp., the parent company of Downey Savings, revealed in its quarterly filings that the Office of Thrift Supervision, its main regulator has imposed several restrictions on its activities. Marketwatch reported that Downey can't:
"pay dividends without checking with the Office of Thrift Supervision first. The company's bank can't increase assets beyond net interest credited on deposits without OTS approval. It can only renew debt or borrow more money if the OTS doesn't object, according to the filing.
Downey also can't pay certain types of compensation and severance; it must tell the OTS before changing directors or executives, and before going ahead with transactions between any of its affiliates or subsidiaries, the filing also disclosed."
The company reported elevated levels of withdrawals after reporting a $219 million loss in late July but the article reports that it is has lately experienced a net inflow of funds.
The company has $13.5 billion in assets, making it a substantially sized bank. A look at their website shows that they are offering very aggressive CD rates. Their one year CD yields 4.30% APY which is close to the best cd rate on the BestCashCow rate tables. (the top cd rate is 4.34% APY). These rates are only for California branches and for new money. The bank doesn't seem to have a way to open an account online.
Downey's stock is trading in the $2 range, down from a 52 week high of $63.17. If you do open an account at Downey, you should be very careful about exceeding FDIC insurance limits.
Related Articles:
Downey Savings Bank 4.60% APY 18 Month CD Special by BankMan - Aug 22, 2008.
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