Saturday, April 13, 2002

Federal insurance changed everything

20 years ago, thrift depositors were vulnerable

By Jeff McKinney,
The Cincinnati Enquirer

        Federal insurance means Ohio residents today won't be victimized if there should be a repeat of the savings and loan collapse of nearly two decades ago.

        In the wake of the savings and loan crisis in Ohio — caused by Home State's failure — all new savings banks and savings and loans were required to make sure deposits were covered by the Federal Deposit Insurance Corp.

        That was not the case nearly 20 years ago. Then, Home State was the main force in the Ohio Deposit Guaranty Fund, which insured about 80 percent of the deposits for all other state-chartered thrifts.

        “The biggest difference be tween now and then is that deposits in state-chartered deposits are FDIC insured,” said Dennis Ginty, a spokesman for the Ohio Department of Commerce.

        The department includes the Ohio Department of Financial Institutions, which regulates all state-chartered savings loans, banks and credit unions in the state.

        As of 2001, there were 68 state-charted thrifts — 42 savings and loans and 26 savings banks. Total assets for those entities were $11.7 billion.

        Mr. Ginty described the financial health of the institutions as good. The state's thrifts are well capitalized and they're achieving good profitability.

        “It's been nearly 10 years since a state-chartered thrift failed in Ohio,” he said.


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