DOWNEY FINANCIAL CORP.

                             RESOLUTION DFC001-2000a

                DIRECTORS' MEETINGS, COMMITTEES AND COMPENSATION


WHEREAS, the time, location of and other particulars with respect to the regular
meetings of the Downey  Financial Corp. (the  "Corporation")  Board of Directors
should be established; and

WHEREAS,  in order to fulfill its duties to  shareholders  and  efficiently  and
effectively carry out its  responsibilities it is necessary and appropriate that
this Corporation's Board of Directors  ("Board") establish  committees to assist
the Board; and

WHEREAS,  the Board has determined that the creation of the committees from time
to time to carry out certain  duties and  responsibilities  of the Board to keep
the Board informed and involved is in the best interests of this Corporation and
will permit this Board to more effectively carry out its duties; and

WHEREAS,  the Board has determined  that it is necessary and appropriate for the
recruitment  and retention of directors who are not also full-time  employees of
the  Corporation or any of its  subsidiaries  to provide for  compensation to be
paid to such directors.

RESOLVED,  that the Regular  Meeting of the Board of this  Corporation  shall be
held at the  corporate  office  of Downey  Savings  and Loan  Association,  F.A.
("Downey")  on the fourth  Wednesday  of each  month,  or at such other time and
place as this Board may designate; and

RESOLVED FURTHER,  that the standing  committees of the Board shall be the Audit
Committee,   the  Compensation  Committee,   the  Executive  Committee  and  the
Nominating Committee; and

RESOLVED  FURTHER,  that  this  Board  shall  from  time to time  appoint  other
committees to fulfill the duties and responsibilities  assigned to this Board as
this Board shall determine; and

RESOLVED  FURTHER,  that the  compensation  of each Director,  who is not also a
full-time  employee of this Corporation or any of its subsidiaries shall be paid
by the Corporation and Downey as follows:

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                                  CORPORATION         DOWNEY           DSL
                                  -----------         ------           ---

Annual Retainer                     $12,000          $12,000

Joint Regular Board Meetings        $   500          $   500

Corporation Board Meeting Only      $ 1,000          $   N/A

Downey Board Meeting Only           $   N/A          $ 1,000

DSL Board Meeting Only                                               $1,000

Board Committee Meeting             $ 1,000          $ 1,000

Chairman of Corporation             $ 2,500          $ 2,500
and Chairman of Downey
Additional Annual Retainer.

Chairman of Corporation's Audit     $ 5,000          $   N/A
Committee, Additional Annual
Retainer.

Chairman of Corporation's           $ 3,000          $   N/A
Compensation Committee
Additional Annual Retainer.

In the event a Corporation  Board Committee or Downey Board Committee meeting is
held on the day of a Corporation  Board or Downey Board meeting,  no Corporation
Board Committee or Downey Board Committee Fee will be paid.

A Corporation  Board Committee meeting fee of $1,000 will be paid for attendance
at  each  meeting  of  the  Audit,   Compensation,   Executive,  and  Nominating
Committees,  if so  determined  by the Chair of the  committee.  A Downey  Board
Committee  meeting fee of $1,000 will be paid for  attendance at each meeting of
the Downey Board Loan  Committee if so determined by the Chair of the committee.
In the event more than one Corporation or Downey Board committee meeting is held
on a day other than a regular  Corporation or Downey Board of Directors  meeting
day,  only one  Board  Committee  meeting  fee will be paid.  In the event a DSL
Service  Company  Board meeting is held on a day when no  Corporation  or Downey
Board meeting or Committee  meeting is held, a DSL Service Company Board meeting
fee of $1,000 will be paid by DSL Service Company.

The  Chairman of the  Corporation  receives  an  additional  annual  retainer of
$2,500,  which is paid semi-annually in advance. The Chairman of Downey receives
an additional annual retainer of $2,500, which is paid semi-annually in advance.
The  Chairman  of the  Corporation's  Audit  Committee  receives  an  additional
retainer of $5,000 and the Chairman of the Corporation's  Compensation Committee
receives an additional  retainer of $3,000, both of which are paid semi-annually
in advance.

Directors of the Corporation and Downey will be reimbursed for reasonable out-of
pocket expenses incurred in the performance of their duties  respectively by the
Corporation and by Downey.

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RESOLVED  FURTHER,  Directors of the  Corporation are entitled to participate in
and receive the medical benefit coverages provided to Downey employees,  subject
to employee eligibility  requirements.  Any non-employee  director who elects to
waive medical benefit  coverage with Downey will be eligible to receive the cash
value in lieu of the medical benefit coverage;

RESOLVED FURTHER, a retirement benefit (the "Director  Retirement Benefit") will
be payable  to each of the  Corporation's  directors.  The  Director  Retirement
Benefit will be paid to each director, or his or her designated beneficiary,  in
equal monthly installments for a period of sixty (60) months beginning the month
following his or her retirement.  The aggregate Director  Retirement Benefit for
each  director  will  equal  one-third  of the  number of months of service as a
director by such individual (up to a maximum of 15 years of service)  multiplied
by the average monthly qualified  (non-employee)  director  compensation paid to
such individual  during the three (3) years  preceding  cessation as a director.
Qualified  director  compensation  includes the annual retainer plus all meeting
fees for the Board of Directors and  Committees of the  Corporation,  Downey and
DSL  Service  Company.  The  right of each  director  to begin to  receive  such
Director  Retirement  Benefit is subject to the  following  conditions:  (i) the
individual  shall  have  ceased  serving as a director  of the  Corporation  and
Downey;  and (ii) the  individual  shall have served as a director  for at least
three years. If a majority  interest of the  Corporation's  outstanding stock is
transferred  or  acquired  (other  than by will or by the  laws of  descent  and
distribution),  then the  entire  earned  Director  Retirement  Benefit  becomes
payable  immediately and the three-year  minimum service  requirement  described
above does not apply. If a retired director so requests, the Corporation, at its
option, may make a single lump-sum payment of the Director  Retirement  Benefit.
Any such payment  would be  discounted  at the interest  rate then in effect for
Downey's five-year certificate of deposit. Retired Directors are not eligible to
receive the cash value in lieu of the medical benefit coverage;


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