After struggling for more than two years to meet new federal requirements, Irvington Federal Savings and Loan Association of Baltimore was taken over by federal regulators yesterday morning.
Depositors will continue to have access to all their deposits, even those above the $100,000 federal deposit insurance limit, said W. Robert Haley, a spokesman for the Resolution Trust Corp., the federal agency that handles the nation's insolvent thrifts. "It will be business as usual," he said.
Although all deposits remain available, balances over the $100,000 limit are not insured and might not be accessible to depositors if the RTC sells the thrift.
The thrift will not be taking new applications for loans and is reviewing those that are pending, Mr. Haley said.
The RTC took control of Irvington's three branches about 10:30 a.m. yesterday. The branches are at 4102-08 Frederick Ave. in Baltimore, 711 Quarterfield Road in Glen Burnie and 4179 Mountain Road in Pasadena. The branches will keep their regular business hours.
Under standard RTC procedure, all deposits and some of the assets of Irvington Federal were transferred to a newly created entity called Irvington Federal Savings Bank. The RTC now begins trying to find a buyer for the thrift.
The savings and loan is the ninth Maryland thrift to be seized by federal regulators since early 1989.
Irvington Federal had assets of about $47 million and liabilities of about $46.6 million, including about $46 million in 7,704 deposit accounts.
William J. Ottey, the president of Irvington, was not available for comment.
The thrift's problems can be traced to its takeover of troubled Germania Federal Savings and Loan in early 1986. At that time, the Federal Home Loan Bank guaranteed the thrift five years to put the new combination in financial order, Mr. Ottey said in a 1989 interview.
But that guarantee was canceled when new regulations went into effect in 1989 and Irvington could no longer count the $4 million in non-tangible assets it had inherited from Germania. "It's like they changed the rules of the game right in the middle," Mr. Ottey said in late 1989.
After selling two branches, the thrift was in compliance with two of the three federal capital requirements, Mr. Ottey said early last year. But late last year, Congress passed a law requiring the RTC to take over thrifts that fell below a certain capital requirement and stayed there for more than 30 days.
"I think Congress is continuing to hamper the ability of the regulators to work with savings and loans that were not criminals or what I call 'high fliers' but are strictly in trouble because of new laws," Mr. Ottey said in December. "They are taking away the regulators' ability to work with those thrifts," he said.
In the end, the Office of Thrift Supervision, the agency that regulates savings and loans, said Irvington had suffered losses that "depleted all of its capital," according to a OTS press release.
Last year the thrift had a net loss of $1.3 million, primarily as a result of a $1.5 million provision for expected loan losses, the OTS said.