Bank founded in 1920 in Baltimore is shut down

Maryland Leader Friday 9th July, 2010

Ideal Federal Savings Bank, of Baltimore, Maryland, was shut down on Friday by the Office of Thrift Supervision, ninety years after it was established.

Founded by Teackle Wallis Lansey, Ideal was the oldest Black owned financial depository in the state of Maryland.

The bank was established to help black families purchase homes in the Baltimore area. It opened its doors for the first time one Thursday evening in August 1920. The bank was located in the same community for 88 years, owning and occupying the same building in Baltimore since its founding.

In 1962, the Bank was reorganized by E. Gaines Lansey, son of the founder and William H. Murphy, Sr., a prominent Baltimore City lawyer, who was named the new President. In 1986, E. Gaines Lansey, Sr. was elected President. Ms. Yvonne F. Lansey, granddaughter of the founder, became a member of the Board of Directors in 1977 and was elected President January 18, 1988.

According the United States Office of Thrift Supervision, Ideal Federal Savings Bank was one of only 21 minority owned thrifts in the USA and one of only twelve black owned thrifts, nationally.

Between 1888 and 1934, 134 Black banks were established. Berean Savings Association in Philadelphia, which opened in 1888, is thought to be the oldest still operating Black owned financial institution in the United States.

Between 1962 and 1979, that number increased; but, as of Friday, as a result of mergers and closings, only 48 black owned depository institutions remained. That number has now been reduced to 47.

The Federal Deposit Insurance Corporation (FDIC), which was appointed receiver to Ideal Federal on Friday approved the payout of the insured deposits of the failed bank.

The FDIC was unable to find another financial institution to take over the banking operations of Ideal. Brokered deposits will be wired once brokers provide the FDIC with the necessary documents to determine if any of their clients exceed the insurance limits, the FDIC said in a statement. Customers who placed money with brokers should contact them directly for more information about the status of their funds.

As a convenience to local depositors, the FDIC says it has made arrangements for the insured funds in demand accounts, savings accounts, NOW accounts, insured CD's, and any other transactional accounts to be transferred to the Manufacturers and Traders Trust Company ("M&T") located at 715 N. Howard Street, in Baltimore, Maryland.

M&T Bank will also accept the failed bank's direct deposits from the federal government, such as Social Security and Veterans' payments through Saturday, September 4.

Customers will have access to their accounts at this branch only between Monday, July 12 and Saturday, July 24. After July 24, the FDIC will mail any remaining funds to the address on record for the owners of these accounts.

As of March 31, 2010, Ideal Federal Savings Bank had approximately $6.3 million in total assets and $5.8 million in total deposits.

Beginning on Monday, customers of Ideal Federal Savings Bank with deposits exceeding $250,000 at the bank can visit the FDIC's Web page "Is My Account Fully Insured?" at https://www2.fdic.gov/drrip/afi/index.asp.

The FDIC said it would retain all the assets for later disposition except for cash, correspondent accounts, and loans fully secured by deposits.

The cost to the FDIC's Deposit Insurance Fund is estimated to be $2.1 million. Ideal Federal was a full service bank with expertise in purchase, refinance or construction lending. It was one of two Baltimore, Maryland banks closed on Friday. The other was Bay National Bank.