BALTIMORE -- About 6,400 depositors with money still frozen at First Maryland Savings & Loan Association in Silver Spring will receive 20 percent of their remaining account balances by the end of June, Maryland officials have announced.
The Maryland Deposit Insurance Fund Corp., the receiver for First Maryland since its collapse in the savings and loan crisis of 1985, will mail out checks totaling $35 million to depositors "on or before June 30," according to MDIF spokesman Bruce Bortz.
About 1,300 accounts with $1,000 or less will be paid in full, Bortz said.
So far, MDIF has paid out about $109 million to the original 24,000 depositors at First Maryland in earlier distributions. Those depositors had a total of $281.5 million in accounts at First Maryland when it collapsed.
The money, resulting from the sale of First Maryland loans and real estate assets, is part of MDIF's effort to recover depositors' funds frozen by court order after massive runs on the state's savings and loan institutions forced several to close in May 1985.
Old Court Savings & Loan Association in Baltimore, another large S&L, was closed and placed in state receivership, while other S&Ls were sold to other financial institutions.
MDIF has estimated that its sale of First Maryland assets will ultimately come about $60 million short of the original $281.5 million in depositors' funds, a shortage that may have to be paid by Maryland taxpayers through an appropriation by the legislature.
State officials had considered a proposal to sell $400 million in bonds to raise money to pay depositors at First Maryland and Old Court. But fearing that sale could cost the state its coveted AAA bond rating, officials announced last week that they were scrapping the plan.