Old Court Savings and Loans
| Company type | Savings and loan association |
|---|---|
| Industry | Financial services |
| Headquarters | Pikesville, Maryland , United States |
Key people | Jeffrey Levitt (president) |
Old Court Savings and Loan (also known as Old Court Thrift Savings) was a savings and loan association operating out of Pikesville, Maryland. Its downfall, caused by embezzlement committed by its president Jeffrey Levitt, led to the collapse of the state's deposit insurance entity.
Collapse of state deposit insurance corporation
The Maryland Savings-Share Insurance Corporation (MSSIC) was established in 1962 as a quasi-public, non-profit organization to provide deposit insurance for savings and loan associations chartered within Maryland. By May 1985, concerns emerged regarding the financial health of both Old Court and Merritt Commercial Savings and Loan. Old Court had experienced a dramatic increase in deposits, growing from $86 million to $839 million over three years by offering elevated deposit interest rates, which allowed it to engage in high-risk lending activities. Merritt’s vulnerability stemmed from loans extended to a repossession company that ultimately failed. These developments undermined depositor confidence in MSSIC’s capacity to secure their funds, triggering widespread withdrawals from all state-chartered thrifts. The resulting liquidity crisis caused Old Court to collapse and led to the downfall of MSSIC. In response, Governor Harry Hughes imposed a monthly withdrawal limit of $1,000 to restore stability. Following this crisis, the Maryland General Assembly convened two special sessions in 1985 to create the Maryland Deposit Insurance Fund (MDIF) as MSSIC’s successor.
Conviction of Levitt
Jeffrey Levitt, who served as president of Old Court, admitted guilt to charges involving theft and misappropriation of bank assets connected to the institution's failure. He was incarcerated in Maryland for six years and granted parole in 1993. Afterward, Levitt moved to Florida where he established a cigar retail business.
Subsequent events
The failure of state-level bank insurance programs in Maryland, Ohio, and Arizona anticipated the broader collapse of the Federal Savings and Loan Insurance Corporation. Additionally, this situation precipitated the Supreme Court decision in Tafflin v. Levitt, which clarified whether civil RICO claims could be adjudicated within state courts.