When Koinonia Baptist Church was founded five years ago, church members could find only one place that would accept their initial $251 deposit: Ideal Federal Savings Bank.
"It was the only financial institution in Baltimore that would let us open an account with less than $500," said the Rev. Douglas Miles, pastor of the now 300-member church in East Baltimore.
"The other banks also wanted us to be in existence for a year and already incorporated," Miles added.
Koinonia's story is echoed by dozens of others who laud the West Baltimore institution for working with customers who don't fit the lending standards of many banks.
Today, after surviving Maryland's savings and loan debacle a decade ago, the family-run institution is still on the same block of hTC Druid Hill Avenue where it was founded nearly 80 years ago. It reports stagnant deposits, but is looking to grow by offering checking accounts beginning next month, and is scouting locations for its first branch.
"There's a need for growth because I want to better serve the public," said Yvonne Lansey, 51, Ideal's president and the fourth generation of her family involved in running the institution. She noted that she would like to make more construction loans to help generate income.
The institution, although known as Ideal Federal Savings Bank, is actually a mutual association owned by its depositors. Tiny by the standards of the lending industry -- its $7 million in assets make it the smallest of the state's five black-owned financial institutions -- Ideal is nonetheless rich in history.
Located on the cramped first floor of a rowhouse near the Druid Hill YMCA, Ideal was founded as a home loan association by eight black men in 1920 to provide mortgages for African-Americans at a time when many banks wouldn't.
Like many such neighborhood associations at that time, it opened just one night a week to do business.
On Thursday nights -- then the night off for household help -- dozens of cooks, chauffeurs and maids, along with some professionals, mostly teachers -- would line up at the association's two teller windows to deposit their money, turning it into something of a social occasion.
It wasn't unusual for men to gather in the back for a beer and a friendly card game, regulars recall.
Even after it was open five days a week, the association also opened for a couple of hours one night a week through the early 1970s in keeping with the tradition, Lansey said.
Like many banks, the association ran into trouble when President Franklin D. Roosevelt called a bank holiday in March 1933 at the height of the Depression. There was a run on banks and many folded, unable to pay their customers. But Ideal "paid off every depositor 100 cents on the dollar," though it took several years, Lansey said.
Eventually, its officers closed the association and let the charter lapse in the mid-1940s.
In 1962, Ideal was re-established by Yvonne's father, E. Gaines Lansey, and William Murphy Sr. to provide home loans to blacks -- many of whom were moving to newly integrated neighborhoods. Murphy later became a well-known community leader and is now a retired district judge.
The association's viability was threatened again in 1985 when it got caught up in the collapse of Maryland's state-chartered, privately insured S&L; system.
But while panicky depositors formed lines at many savings and loans demanding their money back, only two of Ideal's customers closed their accounts, Lansey said.
Lansey's father considered closing the association, but out of loyalty to the thousands of customers who remained calm during the panic, he stayed in business and sought and received federal insurance.
It was during the '60s and '70s that Ideal gained a loyal customer base -- members of the expanding black middle class who left the Druid Hill Avenue area for such city neighborhoods as Ashburton and Forest Park or the suburbs, Yvonne Lansey said.
Today, many of those people keep money in low-yield passbook accounts rather than more lucrative investments, at least in part because "they recall when they could not go to white banks to get loans," said James Crockett, a long-time real-estate company owner.
Crockett said his only criticism of Ideal is that "it's ultraconservative" when it comes to making home loans.
State Treasurer Richard N. Dixon said Ideal "has been one of the most solid financial institutions in the state for a long time."
When he was a stockbroker, Dixon handled Ideal's investments and became friends with E. Gaines Lansey, whom he recalls as "one of the most astute businessmen I've ever known."
Even Yvonne Lansey marvels at the loyalty of her customers.
"We have customers who have retired, moved to Washington or somewhere else, but keep their bank accounts here," she said. "When they want to make a deposit, they'll mail their passbook in with their check and we mail it back to them."
But Lansey said the customer base is declining.
"When the children inherit the money, they take it out of the bank and put it in the stock market," she said.
Ideal has $6.1 million in deposits, a figure that has basically held steady for a number of years.
Its officers realized it was costing them new customers to stay in a neighborhood growing steadily poorer, but they remained out of a sense of obligation to a community that many banks had fled, Lansey said.
"Most of the neighborhood business now is just money orders," not savings accounts or loans, Yvonne Lansey said.
Instead of using banks, she said, many area residents use expensive check-cashing outlets that charge a fee of more than 2 percent to cash a check and 24-hour loan services that charge high interest rates.
Yvonne Lansey, who has a master's degree in finance from Long Island University, joined Ideal in 1985 after working for the Federal Reserve Bank of New York, then for such corporate giants as Xerox and Westinghouse.
Like a lot of people who grow up hearing the family business discussed over the dinner table, she had decided early on never to work at Ideal after she finished college.
But that resolve melted when her father asked her to help him run the business that his grandfather, T. Wallis Lansey, started. His great-grandfather, J. Edward Lansey, was one of the original directors.
She computerized the business and made other concessions to modern banking practices.
Eventually, she became president. Her father, who died in 1992, was president from 1970 to 1988 and then chairman.
At his funeral, Lansey said, she was amazed at the number of people who wrote messages in the sympathy book, thanking her father for granting them loans when no one else would.
She's learned from that and doesn't necessarily crack down on people who get behind in their mortgage payments. She is also known to extend credit to those with stains on their credit histories.
"Most days, when I go home I feel really good, because I know I've helped somebody," she said.
Pub Date: 9/14/97