475 Accounts at Failed S&L; Exceed Limit for Insurance
Customers of Ramona Savings and Loan Assn., the financially troubled Fillmore S & L that was ordered shut two weeks ago, could be stuck with as much as $1 million in uninsured deposits, federal officials say.
Of the accounts held in Fillmore and at the company’s corporate office in Orange, 475 have been identified as having deposits that exceed the federally insured limit of $100,000, officials for the Federal Home Loan Bank Board said.
So far, officials have examined 296 of those accounts, from which they have tabulated $632,000 in uninsured deposits. The remaining 179 accounts must be examined before officials know exactly how much money could be in jeopardy.
‘Very Big Risk’
“As long as the money was placed within insured limits, there’s really nothing to be worried about,” said Andrea Plater, a spokeswoman for the federal agency in Washington. “However, if money is placed over the insured amount . . . you’re taking a very big risk.”
To recover uninsured deposits, customers must file a claim against the bank and wait for its assets to be liquidated, a process that could take several years, federal officials said. The value of those assets at the time of their liquidation will determine what percentage of a customer’s deposits will be recouped, they said.
The Feb. 23 closure of the bank, which has been bought by Midwest Federal Savings & Loan of Minneapolis, was the first in the state this year. On the same day, federal agents shut Mt. Whitney Savings & Loan, based in the central California town of Exeter.
Together, they were the fourth and fifth S & Ls closed in the country this year. Last year, the federal government closed 17 of the institutions.
Although the closure of Ramona did not affect most holders of its 4,274 accounts or its seven Fillmore-based employees, the bank was stripped of the cherished name used since its founding six decades ago.
“Ramona,” the 1884 love story about a fictional Indian girl, brought hordes of visitors through Fillmore near the turn of the century to see Rancho Camulos, the novel’s setting.
Indian Namesake
The tale of Ramona’s love for Alesandro, kept alive by other books and several Hollywood movies, was enough a local legend to serve as the namesake of the savings and loan when it opened for business in 1927.
“That’s one thing the people of Fillmore are sad to see go,” said Wanda Haynes, branch manager and a Ramona employee for 36 years. “We’ve had such a good association with it all these years.”
Ramona’s troubles began to surface in 1986 when poor investments prompted banking officials to seize control and place the savings and loan’s assets under a federal management program.
The institution’s owner, John L. Molinaro, was subsequently found guilty on four criminal fraud charges after admitting that he approved $10 million in loans to business associates who passed along most of the money to another friend who wanted to buy the savings and loan.
Molinaro, who is serving a 2-year prison term for trying to obtain a false passport to flee the country, was found guilty last month of 12 counts of contempt for concealing about $4 million in assets, including $3 million in cash shipped to accounts in foreign banks.
Since taking control, however, federal regulators have been unable to find solutions to Ramona’s fiscal woes. With only 29% of the bank’s investments returning a profit, the Federal Savings & Loan Insurance Corp. ordered the institution liquidated.
Because all deposits under $100,000 must be insured, the liquidation is expected to cost the federal agency $76.3 million. Meanwhile, Midwest Federal agreed to pay $5.6 million to assume Ramona’s $102 million in deposits. In return, Midwest, which has $3.5 billion in assets, will be given permission to branch out its operation in the lucrative California deposit market.
The bank, which donned the Midwest Federal banner on Feb. 29, will honor Ramona Savings & Loan checks until new ones are issued.
