Depositors in Ohio S&L; Seek Full Repayment

More than 1,500 depositors of the closed Home State Savings Bank began applying pressure on lawmakers Sunday for a quick return of 100% of their money, which has been frozen for more than a week during a state-ordered shutdown of 70 savings and loan associations.

During a solidarity meeting at Xavier University, hundreds of the depositors filed onto the field house floor to jot down the phone numbers of their state representatives, sign petitions demanding the reopening of Home State within a week and write letters stating they would settle for no less than a return of all their money.

In addition, a lawyer representing the state said at least 10 financial institutions had expressed interest in buying Home State, which has 33 branches in Cincinnati and Dayton.

‘Intense Urgency’

“We placed our money in Home State because it was guaranteed in full,” said Lisa Neidich, an unemployed nurse who helped organize the meeting. “We feel an intense urgency to take action now.”

The state closed Home State March 6 after a three-day run by depositors to withdraw their money after learning that ESM Government Securities Inc. of Fort Lauderdale, Fla., collapsed while heavily indebted to the institution.

Home State was the largest institution insured by the private Ohio Deposit Guarantee Fund, and doubts about the insurance company’s ability to cover deposits elsewhere prompted the statewide S&L; crisis.

The other S&Ls; were then ordered closed by Gov. Richard F. Celeste on March 8 to protect depositors’ monies while banking officials applied for coverage from the Federal Savings and Loan Insurance Corp. Federal officials began granting the insurance late in the week.

Forty-nine of the S&Ls; were back in business Saturday, and a state official said all 70 of the closed institutions “should be open Monday.” But it was business as usual for only five of the S&Ls.;

State officials said the other 44 were working under emergency legislation passed this week that approved only partial business, allowing withdrawals of only up to $750 per month while the S&Ls; applied for federal insurance.

Mark Stachler, a Dayton business executive who helped organize a Home State protest in Columbus last Wednesday, said he felt that he and others were betrayed by state officials who reassured them two weeks ago that their money was safe.

“We remained calm and trusting (during the run) . . . and listened to those who said there was nothing to fear but fear itself,” he said. “Celeste’s reputation and political future is riding on what he does for the faithful.”

Joanne Schreiner, a lawyer representing the state in its efforts to find a buyer for Home State, offered the depositors a glimmer of hope.

She said the state’s top priorities are to find a buyer who will return all depositors’ money, adding that state representatives have held talks with at least 10 institutions that have expressed interest in taking over Home State.

She said state officials hope to hear something decisive from interested buyers today.

In other developments, a group of major insurance companies will hear a proposal this week to provide $1 billion worth of temporary insurance for Ohio’s privately insured S&Ls;, according to a published report Sunday.

State officials have been working with the insurance industry on the plan that is to be presented to the group by Marsh and McLennan, the world’s largest insurance brokerage consulting firm, the Cincinnati Enquirer said.

“No comment,” Rick Spencer, spokesman for the state Commerce Department, said Sunday when asked about the report.

The policy would last only until the institutions are covered by federal deposit insurance or are merged with companies that already are federally insured, the same as guidelines for reopening set by an emergency state law enacted last week after a “bank holiday.”