Evening star. [volume] (Washington, D.C.) 1854-1972, 1962-03-18
BY ALEX r. PRESTON
Star Staff Writer

ny ALEA n. PhESION
Star Staff Writer
RICHMOND, Mar. 17.-Vir-
GINA officials, after looking at
Maryland's savings and loan
difficulties, say, 1T can't hap
pen here"
They cite combination of
regulation and inspection laws
governing this type of business,
some of which date back at
least 80 years. Maryland made
a start only last year.
Strict regulation in the Old
Dominion explains why there
are only SO associations in the
State compared with 469 in
formerly unregulated Maryland.
An official of the Banking
Division of the State Corpora
ton Commission, said an as
ISOLATION is chartered to do
business only after public
hearings.
Hearings Hard Fought
These hearings are generally
fought so hard" he said that
if there were any scallywags in
volved, they undoubtedly would
be exposed"
The closing of II firms in
the last eight months in Mary
land has become a hot political
issue in the race for Governor
of that State. Savings and loan
associations have never been g
campaign issue in Virginia.
These are among reasons the
Virginia businesses have not
been beset by troubles akin to
Maryland's:
Of the 469 Maryland associa-
lions, only SO are insured by
the Federal Savings and Loan
Insurance Corp.
100000 Investors
Of the SO Virginia firms, the
Sd which do business with the
public are required by the State
Corporation Commission to
carry FSLIC backing. The re-
naming Is are described by
Mark Sewers, executive vice
president of the Virginia Saw
ings and Loan League, as
CLOSED or family corporations
that do not take money from
the public but do make small
loans. Their total assets are
not more than SIS million"
At the close of last year, he
added, the 81 associations issu-
ing shares to the public had
assets totaling 1904 million
with 1894 million invested in
mortgage loans. These involve
about 100000 investors.
The Virginia regulatory body,
the State Corporation Com
mission, is the quasi-judicial
state agency that controls all
types of banking, public utility
and similar activities in which
the public has a financial stake
1t is the agency that grants a
charter to do business.
Investigation Comes First
Before a new association
can be approved" an sec
spokesman said, I'VE make a
field investigation to determine
whether it's officers and direc-
tors are morally fit, financially
responsible and have proven
business ability.
Furthermore, we go into
the community to determine if
public convenience and neces-
sity justify establishment of
a savings and loan institution
there"
We've had effective saving
and loan laws for as long as my
memory goes back as to what
securities may be invested in,
Mr.. Sewers said.
He believes the laws begin
about 1927.
Under Virginia's laws, every
association doing business with
the public must carry insurance
either with an agency of the
Federal or State governments.
There is no State inSuring
agency, so this means the as
Observation-Disclosures chartered
by the State or Federal govern
mentS-must have FSLIC COW
erage," he said.
False Advertising
Breaking down the SO Vir-
ginia associations, 20 are fed
orally chartered and 40 are in
corporated by the sec. All Of
the federally- chartered and Is
of those incorporated by the
State carry FSLIC insurance
because they are the ones &C
ceptlng accounts from the
public.