Chevy Chase Bank

Chevy Chase Bank, F.S.B.
Company type	Privately held company
Industry	Banking
Founded	1955
Founder	B. Francis Saul II
Defunct	September 13, 2010
Fate	Acquired by Capital One
Headquarters	Bethesda, Maryland, United States
Area served	Delaware, Maryland, Virginia, District of Columbia
Key people	B. Francis Saul II (Chairman)
Products	Consumer banking, residential mortgage lending
Owner	B. F. Saul Real Estate Investment Trust
Parent	Capital One (from 2009)

Chevy Chase Bank, F.S.B. stood as the largest banking institution headquartered within the Washington Metropolitan Area. In February 2009, it was acquired by Capital One, and by September 2010, the bank was fully transitioned to operate under the Capital One Bank brand. Although its name suggested otherwise, Chevy Chase Bank functioned as a federally chartered thrift institution overseen by the Office of Thrift Supervision, rather than a conventional bank.

The bank was under the ownership of the B. F. Saul Real Estate Investment Trust, with B. Francis Saul II—the REIT’s founder and grandson of the original B. F. Saul Company founder—serving as chairman.

History

The bank traces its roots back to 1892 when Bernard Francis Saul established the B.F. Saul Company, specializing in mortgages and real estate services. In 1955, a savings and loan charter was obtained but remained dormant until 1969, when it was acquired to create the Chevy Chase Savings And Loan Association, named after the Maryland community of Chevy Chase.

On December 1, 1969, Saul’s grandson, B. Francis Saul II, launched the savings and loan institution, marking exactly fifty years since his grandfather founded Home Savings and Loan (which later merged into American Security Bank, now part of Bank of America). The institution became an FDIC-insured federal savings bank in 1985 and was renamed Chevy Chase Savings Bank, F.S.B. in 1986.

Growth continued with the 1988 acquisition of Standard Savings and Loan Association based in Grundy, Virginia. The bank adopted its final name in 1994 and transferred its charter registration from Chevy Chase to McLean in 1996. Headquarters were relocated to Bethesda in 2001. Notably, in 1995, it purchased and refurbished the historic Alex. Brown & Sons Building in Baltimore to serve as a branch office.

On December 4, 2008, Capital One announced its intent to acquire Chevy Chase Bank; this transaction was finalized on February 27, 2009. By September 13, 2010, all branches had transitioned to operate under the Capital One Bank name.

Business structure

Chevy Chase Bank specialized in consumer banking and residential mortgage lending, with its subsidiary B.F. Saul Mortgage Company recognized as a prominent regional mortgage originator. As of December 31, 2007, deposits totaled $14 billion. The bank maintained a network exceeding 290 branches throughout Delaware, Maryland, Virginia, and the District of Columbia, featuring the most extensive ATM system within the Washington area.

Routing details indicated Laurel, Maryland as the bank’s base; however, its main offices were situated in downtown Bethesda at Wisconsin Avenue and East-West Highway. According to its FDIC charter, prior to acquisition by Capital One (which is headquartered in McLean), the institution’s official headquarters were located in McLean, Virginia.

Competition

The primary competitors for Chevy Chase Bank were retail divisions of major supraregional banks such as Bank of America, BB&T, SunTrust Banks, and Wachovia. The bank distinguished itself through marketing that emphasized local engagement and community ties, featuring a caricature of Benjamin Franklin alongside the slogan The Leading Local Bank in television advertisements.

Litigation

Chevy Chase Bank was involved in two nationwide class action lawsuits alleging violations of the Truth in Lending Act affecting up to 7,000 mortgage customers. A federal district court ruled against the bank in January 2007; however, this decision was stayed pending appeal. In September 2008, the U.S. 7th Circuit Court of Appeals reversed this ruling.

Moreover, the bank consented to a $16 million settlement related to allegations of imposing excessive late fees and high interest rates on credit card accounts while denying any admission of fault.

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