Changing Ownership of Mutual Savings and Loan Associations: An Evaluation

In 1974, the Federal Home Loan Bank Board was permitted to approve 41 savings and loan association conversions from a mutual to stock form of ownership. The sale-of-stock method of conversion has provided opportunities for an association to raise additional capital, expand operations, and increase earnings. In eight associations reviewed by GAO, the primary reason given for converting from a mutual to a stock association was the need to obtain additional equity capital to meet or increase net worth requirements.