THE 1985 MARYLAND SAVINGS AND LOAN CRISIS

On 9 May 1985, Old Court Savings and Loan in the State of Maryland was depleted of $15 million in funds in a run on the institution that was precipitated by rumors of trouble at the thrift. On 13 May 1985, Old Court Savings and Loan was placed in conservatorship, and the State of Maryland contributed $25 million to subsidize the purchase of another Maryland thrift institution, Merritt Commercial, by Chase Bank. Two other troubled thrift institutions, Chesapeake Savings and Loan and Friendship Savings and Loan, were merged whit Chase Bank in the same transaction.

On 13 May 1985 also, Maryland Governor Harry Hughes orders a $1,000 per month withdrawal limit for all depositors at the state-chartered savings and loan associations in the state. Four days later on 17 May 1985, Governor Hughes signed into law hastily enacted legislation (a package of seven separate bills) to address the crisis. One of these seven bills created the Maryland Deposit Insurance Fund to take over from the private insurance fund that had been guaranteeing the deposits at the state-chartered thrift institutions in Maryland. Two days later, 19 May 1985, the governor's general distribution fund paid $111 million to Old Court Savings and Loan depositors. Between the time of the beginning of the savings and loan crisis in Maryland in 1985 and 1987, the State of Maryland took over six thrift institutions in the state. Maryland's savings a

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e dealt with by the FDIC, which eventually sold Bowery's assets at bargain basement prices. The other major thrift institution problems in the mid-1980s surfaced in Maryland and Ohio. In each of those two states, there were large numbers of state-chartered thrift institutions whose deposits were insured by private companies, as opposed to either the FDIC or the Federal Savings and Loan Insurance Corporation (FSLIC). The FSLIC is no longer in existence following the massive savings and loan crisis that developed in the late-1980s. When a large savings and loan institution such as Old Court Savings and Loan Association in Maryland failed, the private deposit insurance company was unable to cover the losses. As a consequence, the depositors in the failed institutions lost their funds, and when the word spread depositor runs began on all savings and loan institutions in those states whose deposits were privately insured. In Ohio, the failure of the Homes Savings and Loan Association and the subsequent depositor runs on other privately insured savings and loan institutions in the state prompted state banking regulators and the Governor of Ohio to close all state chartered, privately insured savings and loan i
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Some common words found in the essay are:
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Approximate Word count = 1666
Approximate Pages = 7 (250 words per page)