Newspaper article THE JOURNAL RECORD

Claremore Bank Issues Retraction / of Full-Page Newspaper Ad concerning Deposits

Newspaper article THE JOURNAL RECORD

Claremore Bank Issues Retraction / of Full-Page Newspaper Ad concerning Deposits

Article excerpt

A retraction by a Claremore bank and a stern letter from the Oklahoma Bankers Association to its membership have ended the lastest e pisode in the continuing unrest between the banking and savings and loan industries in Oklahoma.

At issue was the security of the Federal Savings and Loan Insurance Corp., which protects deposits in state and federal savings and loans, versus the security of the Federal Deposit Insurance Corp., which protects deposits in state and national banks.

In some ways, however, the episode was but another "old banker's tale" on the superiority of banks versus savings and loan institutions, officials said.

"The public and the banking industry needs to know that the bankers have agreed that they (the FSLIC and FDIC) are virtually identical," said Mike Toalson, executive vice-president of the Oklahoma League of Savings Institutions.

"I think that by their own trade organization telling them that the pay outs are almost identical, we have nipped in the bud a problem that has been going on in this industry for years," he said.

The league contested a full-page advertisement for the Rogers County Bank that was published in Claremore Progress newspaper on Feb. 17. The advertisement alleged depositors in a savings and loan did not enjoy the same protections as did depositors of a bank.

According to the advertisement, depositors in an institution protected by the FSLIC "could face a wait of up to seven years before receiving payoff on their deposits," while depositors in institutions protected by the FDIC "would receive payment on his or her deposits up to $100,000 limit within seven days."

Toalson said the advertisement had constituted "a falacious attack on the FSLIC.

"This is not an isolated incident," he said, "as far as banks making statements on pay outs of the FSLIC. This has been going on for years, and not only in Oklahoma."

Under the law, the pay out systems for the FSLIC and the FDIC are virtually identical, he noted. Deposits of up to $100,000 are insured by both corporations, with transfer made "as soon as possible."

Holders of uninsured deposits over $100,000, meanwhile, may require several years to see any return of funds, as FDIC-insured depositors of Penn Square Bank are now discovering.

Public reaction to the advertisement was mixed. Of the two savings and loans in Claremore, Fidelity Federal Savings and Loan and First Federal Savings Bank of Oklahoma, First Federal received the only customer feedback. Its officials now decline comment on the episode.

"As far as we're concerned the issue is closed," said Jeff Jensen, vice-president at First Federal.

But savings and loans in other outlying areas also expressed concern over the publication.

Larry Q. …

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