Meritor Savings Bank

Meritor Savings Bank was a prominent financial institution in the United States, particularly in the Northeastern United States, during the 1980s. It was founded in 1982 as a subsidiary of the PSFS holding company, with the goal of expanding the company's banking operations. The bank's establishment was influenced by the Depository Institutions Deregulation and Monetary Control Act of 1980, which allowed for greater flexibility in banking operations, as seen in the experiences of Bank of America, Citibank, and JPMorgan Chase. The bank's early success was also shaped by the economic conditions of the time, including the 1980s economic boom and the policies of the Federal Reserve under Paul Volcker.

● History

The history of Meritor Savings Bank is closely tied to the development of the PSFS holding company, which was founded in 1928 as a subsidiary of the Philadelphia Savings Fund Society. The company's growth was influenced by the Great Depression and the subsequent New Deal policies, including the Glass-Steagall Act of 1933, which separated commercial and investment banking, as seen in the cases of Goldman Sachs and Morgan Stanley. Meritor Savings Bank's establishment in 1982 was a response to the changing banking landscape, which included the emergence of new players such as Wells Fargo and SunTrust Banks. The bank's early years were marked by rapid expansion, with the acquisition of several smaller banks, including Girard Bank and Philadelphia National Bank, and the establishment of new branches in New York City, Boston, and Baltimore.

● Merger and Acquisition

In 1995, Meritor Savings Bank was acquired by CoreStates Financial Corp, a large banking company based in Philadelphia, in a deal worth over $3 billion. The acquisition was part of a larger trend of consolidation in the banking industry, which included the mergers of Chemical Bank and Manufacturers Hanover Trust Company, as well as the acquisition of Bank of New England by Fleet Financial Group. The merger with CoreStates Financial Corp was influenced by the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, which allowed banks to operate across state lines, as seen in the cases of Bank of America and Wells Fargo. The acquisition of Meritor Savings Bank by CoreStates Financial Corp was also shaped by the economic conditions of the time, including the 1990s economic boom and the policies of the Federal Reserve under Alan Greenspan.

● Services and Operations

Meritor Savings Bank offered a range of financial services, including checking accounts, savings accounts, and mortgage loans, as well as investment banking and asset management services. The bank's operations were influenced by the development of new technologies, including online banking and ATM networks, which were pioneered by companies such as Microsoft and IBM. Meritor Savings Bank's services were also shaped by the emergence of new financial instruments, including derivatives and securitization, which were developed by companies such as Goldman Sachs and JPMorgan Chase. The bank's operations were supported by a network of branches and ATMs, which were located in shopping malls, grocery stores, and other retail locations, as seen in the cases of Wells Fargo and Bank of America.

● Controversies and Issues

Meritor Savings Bank was involved in several controversies during its operation, including allegations of redlining and discriminatory lending practices, which were also faced by other banks such as Citibank and JPMorgan Chase. The bank was also criticized for its role in the savings and loan crisis of the 1980s, which was influenced by the policies of the Federal Home Loan Bank Board and the Federal Savings and Loan Insurance Corporation. Meritor Savings Bank's failure in 1995 was also attributed to its exposure to junk bonds and other high-risk investments, which were also held by other banks such as Drexel Burnham Lambert and Michael Milken. The bank's collapse was influenced by the economic conditions of the time, including the 1990s recession and the policies of the Federal Reserve under Alan Greenspan.

● Legacy and Impact

The legacy of Meritor Savings Bank can be seen in the development of the banking industry in the United States, particularly in the Northeastern United States. The bank's failure in 1995 was a significant event in the savings and loan crisis, which led to a major overhaul of the banking regulatory framework, including the passage of the Gramm-Leach-Bliley Act in 1999, which repealed parts of the Glass-Steagall Act. The bank's history is also closely tied to the development of CoreStates Financial Corp, which later merged with First Union Corporation to form Wachovia, and was eventually acquired by Wells Fargo in 2008, as part of a larger trend of consolidation in the banking industry, which included the mergers of JPMorgan Chase and Bear Stearns, as well as the acquisition of Washington Mutual by JPMorgan Chase. The legacy of Meritor Savings Bank can also be seen in the careers of its former executives, including Richard Kovacevich, who later became the CEO of Wells Fargo, and Kenneth Lewis, who became the CEO of Bank of America.

Category:Defunct banks of the United States