Magazine article American Banker

Second National of Maryland Receives Approval to Branch into Delaware; Thrift Takes Advantage of Interest Rate Rule in State Banking Code

Magazine article American Banker

Second National of Maryland Receives Approval to Branch into Delaware; Thrift Takes Advantage of Interest Rate Rule in State Banking Code

Article excerpt

WILMINGTON, Del. -- A Maryland thrift has surprised Delaware savings and loans by taking advantage of a little-known provision that's been in Delaware's banking code for years.

Its move could lead to tough interest rate competition for Dalaware financial institutions.

The Second National Building and Loan Association of Salisbury, MD., is the first out-of-state S&L to apply for approval to open a branch office in Delaware, according to Delaware's banking commissioner. Its application was approved last week.

Second National and other Maryland S&Ls lining up behind it have a lure that Delaware S&Ls don't -- high interest rates on regular savings accounts.

Under Delaware's banking code, the state's thrifts can offer only 5.5% interest on regular savings accounts until 1986 because their rates are federally regulated and insured. Maryland S&Ls are insured by the Maryland Savings Insurance Corp., and their interest rates are set by the State of Maryland.

Second National has been using high interest rates to attract Delaware customers to bank-by-mail services at its Salisbury branch for 12 years. Its current television commercials, broadcast in southern Delaware, offer 10% interest on statement savings accounts with a $1,000 minimum balance.

Henry A. Berliner Jr., president of Second National, said his thrift hopes to branch throughout Delaware, as economic conditions and the banking commissioner permit. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.