If your parents or grandparents lived in Baltimore, chances are that their bank was one of hundreds of small building and loan associations that dotted the city. Those little corner store thrifts were such shoestring operations that they were usually open only one or two nights a week. Many didn?t even have a telephone. (What today is known as Hull Federal Savings and Loan in Locust Point finally got a phone in 1989, when federal regulations required it).
Decades ago, banking regulations were so nonexistent that when the feds surveyed Baltimore?s mortgage landscape in 1937, they estimated the number of building and loans at 700. A more precise number could not be established, because no one kept a list of building and loans, the feds said. Yet these ma-and-pop lenders made it possible for ordinary Baltimoreans to buy a rowhouse.
In an era that did not know the Federal Housing Administration or 30-year mortgages, the terms were steep. It was common for lenders to demand a 60 percent down payment for a loan that had to be paid back in five years. (Few could amortize the loan in such a short time, of course, necessitating refinancing.) Building and loans were happy to oblige.
It was no accident that many of these building and loans served Baltimore?s tight-knit ethnic communities. Little Italy alone had five of them. There were also several Polish and Bohemian building and loans, where business could be conducted in the language of the old country.
I remember dropping by a building and loan operated on Eastern Avenue by the Klein brothers in the early 1970s. It was a dingy place, filled with piles of papers, because the brothers also ran a real estate office. What piqued my interest was a big picture of the pope occupying a prominent position on the wall. Since the Klein brothers were Jewish, I had to ask what the story was.
Sol Klein put me straight. “Pope, schmope. What difference does it make, as long as everyone is happy and we make money.”
Sol Klein is long gone and so are most of the building and loans. Those that survive have long since caved in to regulatory pressures and become banks. Their names betray their origins, however: Golden Prague, Kopernik, Colombo. Of the segregation-era African-American thrifts Ideal and Advance remain.
The story of Fairmount Federal Savings Bank is an example of their metamorphosis. It was created by six natives of Bohemia in 1879, who met on the second floor of Anton Rytina?s bar in East Baltimore. It had 27 members, whose deposits amounted to $34. All the records were kept in Czech until 1948, when English was adopted as the business language.
The 1960s brought about other changes as well. With East Baltimore?s old Czech enclave waning, the thrift, by then known as the Fairmount Savings and Loan Association Inc., joined the suburban trek and moved to Rosedale in Baltimore County. When it celebrated its 100th anniversary, it received a message of congratulations from President Jimmy Carter.
The next big change came in 1985. With a savings and loan crisis having hit Maryland, Fairmount decided that to safeguard its future, it needed to join the federal savings and loan insurance program. It became a federal savings bank. It is so small, though, that it still operates only one office.
Many other banks that started as building and loans have gone through similar transformations. But as they became federally insured and tightly regulated, they also became acquisition targets. Baltimore?s Maryland Permanent Bank and Trust Co. is an example. The Pikesville thrift, started in 1910 to serve Jewish immigrants, was recently acquired by Warren, Pa.-based Northwest Savings Bank, which has 150 branches in five states.
Northwest started as a building and loan in 1888. It, too, is now regarded as an acquisition target in an industry that favors bigger and bigger banks.
Antero Pietila is writing a book about how bigotry shaped Baltimore between 1910 and 1975. His email address is [email protected].
