The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-12-28
CASH ASSURED
BUILDING, LOAN
SHAREHOLDERS
State Promises Dividend on
LIquidated Assets in
Six Months.
Continued From Page Onel

case of some OF the smaller trusts,
the portion of funds now on hand
would not be large enough to make
distribution worthwhile at this
time, it was explained.
Failure to press collections on
mortgage loans during the COCA
years when money was easy has left
many Of the liquidating building and
loan assets in a frozen condition
The properties on which the long
term loans were made deprecated
sharply in value and tightening of
the real estate market failed to
move them
Mortgage Loans in Demand
Mr.. Ploch has noted. however, an
increasing demand for mortgage
loans from lending agencies such as
insurance companies. Their invest
ing departments. he says, are inter-
ested in any good risk. The Home
owners Loan Corp. and the Federal
Housing Administration both have
been OF aid in liquidating the asso-
Citations assets. Mr.. Ploch has sold
some real estate and has prospects
OF selling more, There now are 80
Marion County associations opar-
atlng under an A or B classification.
1t is through means of this A and
B classification for associations not
yet inSolvenU that the state banking
departments building and loan di-
vision under E. C. Butcher. SUPER
visor. and William R. DeXheimer,
nquldatlng examiner. is guarding
against a recurrence of the chaotic
financial condition in which many
associations found themselves when
the pinch of the depression came.
There were 377 building and loan
associations in Indiana as of Dec.
81, 1884. o. these, 140 have been
placed under Glass A. Twenty-one
in the state have been placed in in
voluntary liquidation, 18 in volun-
tary liquidation, five have been con-
verified into Federal savings and loan
associations, and l6 associations
have already been insured by the
Federal Savings and Loan Insurance
Corp.
Want All Class A
The objective of the banking de-
partment is, Of course. the bringing
OF all Indiana associations under
Glass A. 1t insists that such aSso-
Citations meet the following require
mentS:
l. Unimpaired capital. which
means that the total liabilities of
the association to its shareholders
and creditors shall not exceed value
of total assets as determined by the
department.
2. Contingent fund or reserve
adequate to provide for any actual
or probable losses, Sufficiency of the
fund to be determined by the de-
partment from fair valuation Of
assets.
3. Sufficient liquidity to meet rea-
sonable withdrawal demands OF
shareholders and reasonable Dor
rowing needs of the community.
4. Sufficient earning ability to pay
reasonable dividends on outstand-
ing shares.
Unable to Meet Demands
Glass B associations are those
unable to meet one or more of the
Glass A requirements.
The banking department takes
the sane and reasonable view that
an association unable to enjoy the
position to which such require
ments are conducive, has failed to
justify its existence.
However, the department does
more than play policeman; it sub
mits suggestions through which
Glass B associations may rehabili-
tate themselves and insure them
selves a lease on life.
These suggestions include compe-
tent appraisal, by persons disinter-
ested in the associations. of real
estate owned, appraisal of proper
ties with mortgage loans badly in
default; readjustment of Office
building and furniture and fixtures
account, and write-down or charge
off, with department approval. of
worthless and questionable assets.
Insist on Insurance
In addition, the department in
SlStS IN many cases, as a step to re-
store public confidence. the insur-
ance of shares through the Federal
Savings and Loan Insurance Corp
This is a safeguard similar to the
Federal Deposit Insurance Corp.
which insures bank deposits.
Still another suggested device to
insure further liquidity, either as to
payment or Withdrawals or lending
of money, is membership in the
Federal Home Land Bank.
The Department of Financial In
situations is determined, according
to Richard A. Mckinley, director,
that liquidation must be undertaken
where an association no longer can
serve a need in its community, if its
assets are SO impaired as to make
reorganization impossible or mad
visable, or where directors and
officers persistently disregard the
law and department regulations.
1t is fully empowered by the In
diana Financial Institutions Act to
step in and force building and loan
associations either to place them
SpIVec IN a c0Ilnd ho ciS or Give lin