MNC Financial battens down the hatches in wake of record 0) loss for quarter
MNC Financial Corp., the state's largest banking companyofficially joined the list of troubled Northeastern and mid-Atlantic banks, and made some drastic moves to keep the roof from falling in.
MNC, parent of Maryland National Bank and American Security Bank in Washington, which has been swamped by bad real estate loans, said it suffered a record loss of $173 million during the third quarter of this year and would sell its highly profitable credit card unit, MBNA America, the nation's fourth-largest credit-card company, and a profitable consumer-finance operation, Landmark Financial Services Inc., to raise much-needed capital. Its condition led federal regulators to take a much closer look at the company, and MNC said it had signed an agreement requiring the regulators, among other things, to clear any payment of dividends or changes in top management. Alfred Lerner, chairman and chief executive officer of MNC, said the third-quarter loss stemmed from the company's decision to increase dramatically the amount of money held in reserve to cover any further losses from its troubled loan portfolio. He said the $350 million that MNC added to that reserve over the past three months was more than $100 million more than the regulators required. "The job we have is to get this place fixed," Mr. Lerner said, "and I'm committed to that job. We are taking a realistic, and maybe a pessimistic, view at how deep that hole is and how long it will take to get out of it. I am not telling you we are taking everything we need to take. I am telling you it's a moving target." He said he expected further losses in the fourth quarter but that it was too early to say whether the company would decide in January to pay its fourth-quarter dividend. He held out prospects that the company could be profitable in 1991. "The key word for next year is hope," he said.
Ya-gotta-shut-up-to-play rule draws fire
The Maryland State Lottery Agency angered prospectivbidders on a computer contract that could be worth $75 million by ordering them not to discuss their proposals with legislators, government officials or the news media, a decision that raised charges of bias in favor of Control Data, which supplies the lottery's computers now. Michael W. Law, the lottery agency's procurement officer, said he put the "disclosure prohibition" language in the state's formal request for bids to shield the procurement from political interference. He added that the disclosure language is only advisory, but several vendors disagreed strongly, and one said the language throws into question whether his company will spend the considerable sums required to prepare and enter a bid. "The way I read it," says Joseph A. Schwartz III, who represents a computer company called Scientific Games, "if you're going to protest before the Board of Public Works without the lottery's permission, you've violated the rule. That's nuts." And Delegate Timothy F. Maloney, D-Prince George's, whose subcommittee oversees the lottery agency budget, said the decision on the system should be turned over to the Department of Budget and Fiscal Planning -- a state agency of "independence, integrity and skill."
Baltimore wins round against billboards
The Schmoke administration scored a victory in its fight tremove illegal billboards from Baltimore neighborhoods when a city judge ordered an advertising company to take the signs down within 60 days. Baltimore Circuit Court Judge Joseph H. H. Kaplan also ruled that Boisclair Advertising Inc. must pay for removing the signs, many of which advertise alcohol and cigarettes in poor, black neighborhoods. For the past year, a coalition of community groups, as well as City Council President Mary Pat Clarke and other council members, have sought to remove the billboards, which they contend violate zoning laws and are a blight on neighborhoods. A 1971 zoning law banning billboards in residential neighborhoods has never been enforced. Boisclair and its president, James A. Eatrides, have maintained that many of the billboards were up long before zoning laws existed. Company officials also argued that Mayor Kurt L. Schmoke reneged on an agreement with Boisclair last fall that would have allowed most of the signs to remain. Boisclair's lawyers said the company would challenge the ruling, but Mayor Schmoke, describing the billboards as a public health problem, said the city would fight any attempt to delay removal of the signs.
Talbot says no to condoms in schools
Viewing the issue as morality rather than health, the TalboCounty School Board voted not to let school nurses give condoms to sexually active students. The proposal, made last month by Dr. John M. Ryan, the county health officer, was defeated 4-3, with board President Laura S. Harrison casting the tie-breaking vote. Dr. Ryan had cited an increase in sexually transmitted disease among county teen-agers and a Johns Hopkins University survey showing that 36 percent of Talbot 10th-graders reported frequent sexual intercourse while only 11 percent said they used contraceptives. But County Council President Thomas G. Duncan applauded the board's decision. "What message would we be sending to the 65 percent of the kids practicing abstinence?" he asked. "I'm disappointed," Dr. Ryan said. "The problem is not going to go away just because we don't want to deal with it."