Stuart Davis; Former Head of Great Western Financial

Stuart Davis, former head of Great Western Financial Corp. and a pioneering advocate of the adjustable rate mortgage, has died. He was 81.

Davis, a financial industry leader who was also an early foe of red-lining, died Saturday in Beverly Hills, company officials announced Monday.

Credited with bringing Great Western to prominence as a statewide banking concern, Davis became chairman and chief executive officer of the Los Angeles-based savings and loan company in 1964 and guided it through the inflation-riddled 1970s. He remained chief executive until 1979, chairman until 1981 and on the board until 1990.

During his tenure, Great Western tripled its assets, doubled its number of branch offices and increased its earnings sevenfold. The company was taken over earlier this year by Seattle-based Washington Mutual in a record $8-billion transaction.

In 1955, Davis was elected president of the California Savings and Loan League and in 1975 served as president of the California Chamber of Commerce. He was named Chief Executive of the Year by Financial World magazine in 1977, and a year later was elected president of the United States Savings and Loan League and vice chairman of the Federal Home Loan Bank of San Francisco.

Born in Santa Monica and raised in the San Francisco Bay Area, Davis attended St. Mary’s College in Moraga, Calif., and served in the Navy during World War II. Afterward, he went to work in his father’s First Savings and Loan Assn. of Oakland.

He succeeded his father, Will Davis, as president in 1953 and six years later led the company to merge with Great Western.

After learning about popular European-style variable interest mortgages during his business travels, Davis led Great Western to convert 60% of its mortgage portfolio to the variable rate instruments in the late 1970s, helping the company weather the ravages of high inflation.

He testified before Congress as early as 1975 seeking legislation to permit federal lending institutions to use the variable rate mortgages--a power granted in 1981.

Also a staunch opponent of red-lining, Davis in 1969 was one of the first in the mortgage industry to issue an explicit anti-discrimination directive to loan agents. When federal legislation in 1990 required banks and thrift companies to keep records on the ethnicity of home loan customers, a Times survey of Los Angeles County mortgages showed that Great Western was the region’s largest lender to minorities.

Davis was a trustee of Pomona College and of the California Museum of Science and Industry. He was active in the Oakland Chamber of Commerce, the Urban Renewal Foundation of Oakland and the Southern California Committee for Economic Development.

He is survived by his wife, Mary; two children, two step-children, six grandchildren and three great-grandchildren.

Services are scheduled at 10:30 a.m. Dec. 17 at All Saints Episcopal Church in Beverly Hills.

The family has asked that memorial contributions be made to the John Wayne Cancer Institute at the St. John’s Health Center, Santa Monica, or to the Los Angeles Chapter of the ARCS Foundation Endowment Fund Scholarship for Pomona College.