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Created on Friday, 21 August 2009 11:23 Last Updated on Monday, 03 December 2012 19:19 Published on Friday, 21 August 2009 11:23 Written by Christian Morrow - Courier Staff Writer Hits: 4113
In July, John Haines, president of the troubled Dwelling House Savings and Loan, told the New Pittsburgh Courier he had a “plan on the table” that he believed would satisfy federal regulators who ordered the bank to close if it did not restore $3 million core capital stolen last year in a scheme using bank-to-bank wire transfers.
“We’re waiting to hear from them,” he said.
On Aug. 14, he did, when officers of the Federal Deposit Insurance Corp. closed the bank and began transferring depositors’ accounts to PNC Bank, but not before the federal Office of Thrift Supervision fined five of the bank’s directors for multiple violations of a 2006 order to institute money-laundering prevention procedures.
Board members Barry Balliet, Everett Blanton, David Lendt, Johnnie Monroe and Robert Thornton were fined $1,000 each. Robert M. Lavelle, who the OTS ordered fired in November from his post as president and CEO, was also fined $5,000 for gross negligence.
The bank’s troubles did not become public in May when the OTS declared Dwelling House must take “immediate corrective action” to replenish its capital by June 30. At that point, Haines, a retired Mellon Bank officer who replaced Lavelle, announced that the theft, which occurred in late 2008, left the bank undercapitalized by $500,000.
Despite efforts by community leaders and commitments by Dollar Bank, the Heinz Foundation, the Hillman Foundation and Pittsburgh Foundation to recapitalize Dwelling House, OTS spokesman Bill Ruberry said the financial “hole” was just too deep.
“We actually had examiners on site working with the institution and potential investors right up until the day before we closed it,” he said. “We were working very hard to save the institution because of its history. We want to preserve minority institutions. The night before, it looked like it wouldn’t close. But the amount the investors could put in would not have been enough—the capital deficit was just too large to fill.”
So, on Aug. 17, Dwelling House, the 119-year-old Black-owned institution that prided itself on making home loans to families that other banks would not, became a subsidiary of PNC. Its $13.8 million in assets were converted over the weekend. The offices at Centre and Herron avenues in the Hill District are expected to remain open for 90 days as deposits are moved to the PNC branch at 1860 Centre Ave. across from the Hill House Association.
This does not affect the Lavelle Real Estate business, which will remain in the building on the corner of Herron and Centre avenues.
PNC spokesman Fred Solomon said the bank also took an additional $1.8 million in assets including cash-on-hand and deposits in other institutions. All of Dwelling House’s loans have been taken over by the FDIC.
“You’d have to ask customers how they feel about staying with us,” he said. “But we’ve already helped a number of customers realize what they can do with our wider array of options; checking accounts, ATMs, more branches. In fact, I opened a checking account (Monday) for a gentleman who’d never had one before because Dwelling House was strictly a savings bank.”
As for the loans, the FDIC will service them for now and instruct customers how to make payments. Eventually, they will be bundled and sold at auction to another bank or mortgage institution.
“We are not lenders,” said FDIC Ombudsman Scott Hammer. “Our responsibility is to liquidate the assets.”
Jackie Dixon of Fox Chapel, who in June catered a luncheon for 10 people willing to deposit $1,000 each, said she does not feel her effort was in vain.
“I’m a community servant and I commend those people who made the deposits. They stepped out on faith,” she said. “I’d do it again in a heartbeat.”
Contacted by phone in San Diego, Calif., Tim Stevens, who organized a June 19 meeting to recruit depositors for Dwelling House said he is disappointed.
I read about it in the airport as I was leaving for vacation. It’s really quite sad,” he said. “It was one of the last Black banking institutions in the country. Robert R. Lavelle was there when other banks weren’t. It’s almost too sad to talk about. I don’t know if anyone can replace that spirit or commitment.”
On Aug. 18, standing across the street from the PNC branch where the Dwelling House accounts will be moved, El Gray, of the One Vision One Life anti-violence program said he was shocked by the closure.
“It’s a travesty, especially in a down economy. I think it could create problems in the community,” he said. “In this city, they’re always building buildings, but nobody’s building people. Dwelling House did. Without them, the unfulfilled dreams and aspirations of the community will stay unfulfilled.”
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