S&L; Savers Wait Hours to Get Cash : Depositors Edgy Over Maryland’s Limit on Withdrawals

Loretta Folger quietly fingered the tiny piece of paper with the number 114 written on it in red ink.

Already, the elderly woman had waited five hours in cold, damp weather to withdraw some of her life’s savings from the Old Court Savings & Loan office in this Baltimore suburb. By noon, when number 46 was called, Folger realized that her chances of getting inside the savings institution by its 3 p.m. closing time were slim. Still, she refused to relinquish her place in line.

“We have most of our money in here,” Folger said worriedly as she glanced at her husband nearby.

Folger’s anxiety was echoed by dozens of edgy depositors who huddled around the glass doors of Old Court, seeking not only warmth but, somehow, as much proximity as possible to their money.

Triggered Anxiety

Across Maryland on Wednesday, lines began forming well before dawn at many of the 102 privately insured state savings and loan institutions after Gov. Harry Hughes placed a $1,000-a-month limit Tuesday on withdrawals from such thrifts. Concern was gravest among depositors of Old Court and Merritt Commercial Savings & Loan, two institutions placed under state control after panicked customers withdrew massive amounts of their deposits in recent days.

The new withdrawal limit triggered anxiety, confusion and tension among many depositors. Savings and loan institutions--both federal and state--were flooded with phone calls from customers concerned about how they would pay bills, make mortgage payments, collect certificates of deposit and meet payrolls.

At branches of Chevy Chase Savings & Loan--the largest thrift affected by the governor’s order--busy telephone lines tied up transactions at automatic teller machines, creating even longer lines inside at teller windows. The machines rely on phone lines to help process computer transactions.

But at least some federally insured thrifts and commercial banks benefited from the crisis as customers took their $1,000 from state institutions and deposited the funds elsewhere.

“Today is the day you make your decision on what to do with mortgage payments,” Robert Halleck, executive vice president of federally insured Maryland Federal Savings & Loan, said in an interview.

Like utility companies and other creditors, Maryland Federal is making efforts to accommodate some late payments. The thrift will give people until the end of the month to make mortgage payments, for example, and will waive late fees.

Organized System

“We’re fine,” Halleck said, adding: “It’s nice to have the word federal in our name.”

In Randallstown, Old Court depositors organized the take-a-number system to bring order to long lines. No. 1 on Wednesday arrived at 3 a.m. Later, the crowd cheered as people emerged from the office with their money clutched tightly in their hands.

Mostly, however, they waited.

Frank Lewis, a high school teacher in Catonsville, Md., queued up on behalf of his 80-year-old mother. One of her certificates of deposit matured Wednesday, and she relies on the interest to supplement Social Security benefits.

“She’s very uptight about this,” he said. “She lived through the Depression.”

Nancy Watson, a Randallstown housewife, was among those enticed by higher interest rates at Old Court. “I was sitting back getting $50 to $60 a month interest,” she said, adding that she did not withdraw her money when the crisis began because “I felt if I waited a week things would get better. Now all I can get is $1,000.”

Withdrew Funds

Helen Diehl of Randallstown was luckier, however. Diehl said she and her husband had heard rumors that Old Court might be having problems. “We had our life savings in there,” she said. Last month, they withdrew $40,000 to begin building a house.

As for the funds still in her account, Diehl had written checks exceeding the $1,000 monthly limit before the governor’s order. “We’ve never had a check bounce,” she sighed.

Randallstown pharmacist Barry Bloom, meanwhile, took a day from his vacation to see if he could retrieve part of his children’s savings. “It’s not money I have to have, but I’d hate to lose it,” he said.

But Bloom, who held number 153, had no chance to make the withdrawal. “Maybe I’ll play my number on the lottery,” he mused. “I might have more luck there.”