Word: marylander
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Dates: during 1980-1989
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Even though Maryland's government has no obligation to support the private insurance fund, many customers might have got a false sense of security from the thrifts' prominently displayed decal symbol, which was designed to look very much like the official state seal. "The thing that's scaring me is that everyone else is scared," said Jeff Shank, an auto mechanic who took a four-hour lunch break to withdraw $14,000 in savings from an Old Court branch...
...down the cash drain by ordering the 102 thrifts to limit withdrawals to no more than $1,000 a month. Federal regulators moved quickly to help. The Federal Savings and Loan Insurance Corporation, a U.S. agency that guarantees deposits up to $100,000, sent an army of auditors to Maryland to rush the process of bringing many of the thrifts under its coverage...
Customers at Maryland's privately insured S and Ls have been jittery since the Ohio crisis, withdrawing about $630 million in two months. But like Ohio's episode, which was touched off by the failure of Cincinnati's Home State Savings, Maryland's full-blown panic started with trouble at just one institution. The run began when press reports revealed that Old Court's president and part owner, Jeffrey Levitt, had stepped down under pressure from the insurance fund, which was worried about the thrift's sloppy management and overly rapid growth. In three years, Levitt had pushed the thrift...
That was not all. Maryland authorities contended that Old Court's top officers had engaged in such improprieties as giving themselves lavish consulting fees and writing at least $5.8 million in overdraft checks. Maryland's attorney general is conducting a probe of Old Court's management that could produce criminal charges...
...panic spread to Baltimore's Merritt Commercial Savings (assets: $339 million) following news reports that state regulators had asked the thrift to bolster its cash position by selling a 39-story downtown skyscraper it is constructing. Maryland authorities tried to restore confidence by placing both institutions under the wing of state conservators, but that failed to stop the runs from spreading to other privately insured thrifts...