Battling Banker in Fight of His Life

A short, rotund man with a heart--a friend said as big as himself--Leonard Shane is a gregarious, fun-loving raconteur, a family man and a generous contributor to a variety of charitable groups.

He also is a sharp-tongued advocate and stubborn manager who acknowledges that some of his own executives cower at his command.

To many Republicans, he is the only liberal Democrat they like.

But above all, Shane, 67, is a battler, a bulldog who will fight to the limit for causes he believes in, such as the need for a separate home lending industry.

He is now in the fight of his life. Mercury Savings & Loan, the 24-branch thrift with $2.3 billion in assets that he founded, is insolvent. Federal regulators recently restricted Mercury’s lending and investment powers and stand poised to possibly seize the troubled S&L.;

Shane has shown his feisty traits early on by leading a student strike at Austin High School on Chicago’s West Side, and the principal almost prohibited him from giving his salutatorian address.

At the University of Chicago and, later, at the Illinois Institute of Technology, Shane pursued his love of language, taking all the semantics classes taught by S.I. Hayakawa, who later became a U.S. senator from California.

He left school in 1942 to work for United Press, the wire service. “I wrote big, emotional stories,” Shane recalled recently, on such topics as the Evansville mental school.

At the Democratic National Convention in Chicago in 1944, he walked into a meeting at which President Franklin D. Roosevelt, conferring with his aides, decided to pick Harry S. Truman as his vice president. But Shane didn’t get a scoop on the nomination. Truman asked the young man for a ride to the convention center and ended up driving around town for three hours so that Roosevelt aides, not UP, would break the news on the convention floor.

In 1948, he moved to Los Angeles to take a job with the American Broadcasting Co. affiliate to report on business news, primarily. In a few years, the entrepreneurial bug hit him, and he started the Leonard Shane Agency, a public relations firm that grew to include advertising, commercials and film production.

Local 770 of the Retail Clerks Union, one of his clients, sponsored a local television news talk show, “770 on TV.” For 14 years, Shane hosted an array of guests, including Vice President Richard M. Nixon, former President Truman and U.S. Sen. Wayne Morse of Oregon.

At the age of 39, Shane “retired.” Mayor Sam Yorty appointed him to the Los Angeles Parks Commission in 1961, and he later became the commission president. He helped to get the Los Angeles Zoo and the Children’s Zoo built and to redesign Pershing Square downtown.

Toward the end of his career as a public relations and advertising consultant, Shane came up with a marketing plan for a bank in Hollywood to gather deposits. The bankers flatly rejected the silly notion of giving personalized memo pads to potential customers for free.

“I told them that someday, I was going to have to use this plan and show them how it works,” said Shane, who then was a public relations and advertising consultant.

A few years later, Shane and six others decided to form a savings and loan. Picking the name from a headline in the Los Angeles Times about the Mercury space program, they opened Mercury Savings & Loan in April, 1964, in a storefront office in Buena Park.

Within months, Shane launched his ingenious campaign to attract local residents to deposit their savings at Mercury. He offered them memo pads and unlimited refills as well. The hitch was that anyone wanting the pads had to come into Mercury’s office, where they were offered coffee and treated so well that many became depositors.

Shane took the marketing concept a step further by hiring teachers to go door-to-door with the offer. The strategy brought in hundreds of millions of dollars in core deposits--the kind of stable deposit base the thrifts relish because local residents remain loyal and don’t switch their accounts to other institutions very often.

“I thought that (marketing effort) was sensational--a super strategy,” said Anthony Frank, a former competitor as president of First Nationwide Savings and now U.S. postmaster general. “It was something that couldn’t be duplicated.”

From the time Mercury opened, the lives of Shane and the institution have been intertwined. He has been the only chairman and managing officer the S&L; has ever had.

“That’s his baby. That’s his life,” said Gerry Findley, a Brea financial consultant. “He put his whole mind, his whole life into it. Even the things he did with the trade groups were designed to better his own institution.”

He served as head of both the California and U.S. Leagues of Savings Institutions during the time that the debate on deregulation of the financial services industry was coming to a head.

“He was one of the most outstanding people we had in that position,” William O’Connell, then the U.S. League’s full-time president, said in an interview last week. “He was a brilliant, articulate person. He spoke the S&L; party line on what the business should be and what it should do.”

Under “the guise of so-called deregulation,” he said when he took over as U.S. League chairman in November, 1982, the special financing to foster home ownership was being eliminated. He traveled more than 500,000 miles in three years delivering his message.

He strongly supported Edwin J. Gray, whom he promoted for the post of chairman of the Federal Home Loan Bank Board, the nation’s top thrift regulatory post, in 1983. He backed Gray’s efforts to halt the abuses brought on by deregulation.

Shane “liked the limelight of the trade association and was good at it,” Frank said in a recent interview.

Though Mercury took advantage of some banking powers it had under deregulation, Shane has never given up the fight to maintain a separate industry to fund the American dream of home ownership. In July, 1986, as Mercury was being listed on the New York Stock Exchange, Shane reiterated his theme.

“Those who would promote the idea that all financial institutions are or will be alike are in error as to fact and in greater error as to the best interest of the people of the United States,” he said.