Old Court Savings and Loans (Old Court Thrift Savings) was a state bank

State bank

A state bank is generally a financial institution that is chartered by a state. It differs from a reserve bank in that it does not necessarily control monetary policy , but instead usually offers only retail and commercial services.A state bank that has been in operation for five years or less is...

 headquartered in Pikesville

Pikesville, Maryland

Pikesville is a census-designated place in Baltimore County, Maryland, United States. Pikesville is just northwest of the Baltimore city limits. It is the northwestern suburb closest to Baltimore.The population was 29,123 at the 2000 census...

, Maryland

Maryland

Maryland is a U.S. state located in the Mid Atlantic region of the United States, bordering Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware to its east...

, United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, that failed due to embezzlement

Embezzlement

Embezzlement is the act of dishonestly appropriating or secreting assets by one or more individuals to whom such assets have been entrusted....

 by its president, Jeffrey Levitt.

Collapse of state deposit insurance corporation

In 1962 Maryland established a quasi-public non-profit

Non-profit organization

Nonprofit organization is neither a legal nor technical definition but generally refers to an organization that uses surplus revenues to achieve its goals, rather than distributing them as profit or dividends...

 corporation, the Maryland Savings-Share Insurance Corporation (MSSIC), to insure accounts held in state chartered savings and loan association

Savings and loan association

A savings and loan association , also known as a thrift, is a financial institution that specializes in accepting savings deposits and making mortgage and other loans...

s. In May 1985, rumors of financial instability at two thrifts

Savings and loan association

A savings and loan association , also known as a thrift, is a financial institution that specializes in accepting savings deposits and making mortgage and other loans...

, Old Court and Merritt Commercial Savings and Loan, led to depositors questioning whether MSSIC was financially able to guarantee all of the deposits, resulting in a run

Bank run

A bank run occurs when a large number of bank customers withdraw their deposits because they believe the bank is, or might become, insolvent...

 on all state savings and loan associations. This led to the withdrawal of deposits, the failure of Old Court and the subsequent collapse of MSSIC. The Maryland General Assembly

Maryland General Assembly

The Maryland General Assembly is the state legislature of the U.S. state of Maryland. It is a bicameral body. The upper chamber, the Maryland State Senate, has 47 representatives and the lower chamber, the Maryland House of Delegates, has 141 representatives...

 during two special session

Special session

In a legislature, a special session is a period when the body convenes outside of the normal legislative session. This most frequently occurs in order to complete unfinished tasks for the year , such as outlining the government's budget for the next fiscal year, biennium, or other period...

s in 1985 established the Maryland Deposit Insurance Fund (MDIF) to replace the MSSIC.

Conviction of Levitt

Old Court President Jeffrey Levitt was charged in relation to the failure of the bank for making improper loans and the
looting of bank funds. He served several years in Maryland

Maryland

Maryland is a U.S. state located in the Mid Atlantic region of the United States, bordering Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware to its east...

 prison

Prison

A prison is a place in which people are physically confined and, usually, deprived of a range of personal freedoms. Imprisonment or incarceration is a legal penalty that may be imposed by the state for the commission of a crime...

 before being released on parole

Parole

Parole may have different meanings depending on the field and judiciary system. All of the meanings originated from the French parole . Following its use in late-resurrected Anglo-French chivalric practice, the term became associated with the release of prisoners based on prisoners giving their...

.

Subsequent events

The failure of the State Bank insurance systems of Maryland

Maryland

Maryland is a U.S. state located in the Mid Atlantic region of the United States, bordering Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware to its east...

, Ohio

Ohio

Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...

, and Arizona

Arizona

Arizona ; is a state located in the southwestern region of the United States. It is also part of the western United States and the mountain west. The capital and largest city is Phoenix...

 presaged the national
collapse of the Federal Savings and Loan Insurance Corporation

Federal Savings and Loan Insurance Corporation

The Federal Savings and Loan Insurance Corporation was an institution that administered deposit insurance for savings and loan institutions in the United States...

.

See also

• Savings and loan crisis
  Savings and Loan crisis
  The savings and loan crisis of the 1980s and 1990s was the failure of about 747 out of the 3,234 savings and loan associations in the United States...
  
  
• Tafflin v. Levitt
  Tafflin v. Levitt
  Tafflin v. Levitt, 493 U.S. 455 , is a United States Supreme Court case holding that state courts have concurrent jurisdiction to decide civil claims brought under the Racketeer Influenced and Corrupt Organizations Act .-Background:...