A small savings and loan said Wednesday that it will offer a higher interest rate to working women on individual retirement accounts because women "have a right to catch up."
"As far as we know, no bank in the United States has thought of this," said Ben Langella, Continental Savings of America's director of branches on the San Francisco Peninsula. "We feel that women entered the job market later and had less time to build up their IRA reserves.
"Women have been sort of left out, or are still catching up," he added. "Now we're giving them an opportunity to catch up."
Continental will formally announce the higher interest rate Sunday and will begin offering it Monday, Langella said. Continental's IRAs now offer 11% simple interest, he said. Starting Monday, women will get an 11.5% rate.
Continental, based in San Francisco, has about 27,000 customers with about 31,000 accounts. It has seven branches and assets of $300 million.
An IRA is an account that allows wage earners to shelter up to $2,000 a year from taxes until they retire, when their income would be lower and they would pay a lower tax rate on their savings.
"I think the men will take it one of two ways: They'll be amused or perhaps they might be a little angry about it," Langella said. "I would expect that somebody will make noise about it. But . . . we're going to go ahead and recognize this problem that women face.
"It's just our way of saying, 'Come on women, you have a right to catch up.' "
Andrea Ordin, chief assistant state attorney general in Los Angeles, said: "Under California law, any business establishment which offers services and differentiates between men and women is subject to question.
"The statute that we would be looking at is the Unruh Civil Rights Act, which basically states that all business establishments shall offer their services in an equal manner and shall not discriminate on the basis of sex or race."
Al Stein, administrative adviser with the state Department of Savings and Loans in Los Angeles, said that, from a regulatory standpoint, "I don't know of anything specifically in state law that prohibits this."
Susan Loughridge, Continental's senior vice president for savings, said: "I don't believe we'll have any trouble legally."