Charles H. Brown Jr., the chief state regulator of Maryland's savings and loan industry whose agency has been criticized for contributing to a state-wide thrift crisis that erupted in May, will retire effective Sept. 1, state officials announced yesterday.
The retirement of Brown, 66, was described as voluntary by his boss, Frederick L. Dewberry, the secretary of licensing and regulation, but other sources said that Brown was encouraged to relinquish the post he had held since 1976.
"He was pushed," said one source who asked not to be identified. "There had been a lot of rumblings in state government to get Charlie Brown out of there because he wasn't the symbol the state needs at this time. Here was the guy who rightly or wrongly was seen as responsible for some of the problems still continuing to be the chief regulator of the industry."
Another source within the department of licensing and regulation said that Brown "was not told to retire. He was not pushed, but he wasn't begged to stay on."
Brown could not be reached for comment yesterday.
As the $46,700 per year chief of the division of savings and loan associations, Brown was directly responsible for overseeing the operations of 102 state-chartered thrifts. Alleged abuses at one of them, the Old Court Savings and Loan Association of Baltimore, including allegations of widespread insider loans to its owners, plunged the industry into near chaos in early May.
Brown maintained in the aftermath of the May crisis that his agency was hampered by weak enforcement powers, low pay and not enough trained examiners. But critics, including Attorney General Stephen H. Sachs, said that the savings and loan division was more interested in protecting the industry than policing it.
Although the savings and loan division did not have the authority to remove officers of thrifts or issue cease and desist orders until last month, its parent body, the board of savings and loan commissioners, had the ultimate authority to place an association in conservatorship for unsound practices. In addition, the division worked closely with the private insurance agency known as the Maryland Savings-Share Insurance Corporation (MSSIC), which uncovered serious violations of its own rules at Old Court and some other thrifts as early as January 1984.
Despite that knowledge, Brown assured the General Assembly last winter, during consideration of the legislation to increase the division's powers, that no state-chartered savings and loans were in danger.
Hughes administration officials adamantly maintained yesterday that Brown had been considering retirement for a year and that his decision to leave was entirely voluntary.
"If Charlie Brown had wanted to stay, he damn well would stay," insisted Lou Panos, press secretary to Gov. Harry Hughes, who is in Idaho at a national governors' meeting. "There's no question that he's retiring, not resigning."
Brown's retirement is not effective until September, but he will be on annual leave beginning today. His deputy, William LeCompte, will serve as acting director until Dewberry appoints a successor based on the recommendations of the board of savings and loan commissioners.