Legg files with U.S. to run an S&L 'Purely a defensive measure,' Mason says

Securities

May 14, 1998|By Bill Atkinson | Bill Atkinson,SUN STAFF

In what company officials termed a defensive move, Legg Mason Inc. has filed an application with a federal regulator to operate a savings and loan.

The Baltimore-based brokerage and money management firm XTC filed papers with the Office of Thrift Supervision in Washington to charter Legg Mason Trust Bank FSB.

Raymond A. "Chip" Mason, Legg's chairman and chief executive, said the company has no immediate plans to start the savings and loan even if it gets approval from the regulator.

"This is purely a defensive measure," Mason said yesterday. "None of us know where these regulatory winds are going to blow; therefore, you need to have protected yourself."

A savings and loan, however, would give Legg the ability to offer a broader array of financial products ranging from mortgage loans to auto loans to credit cards, observers said.

"The name of the game is positioning," said Michael Flanagan, analyst and owner of Philadelphia-based Financial Service Analytics. "Increasingly, firms feel that more consumer financial products will be needed to compete."

In recent months, the Office of Thrift Supervision has been flooded with applications by brokerage and insurance companies seeking to start savings and loans. The firms, fearful of regulatory change, are worried that if they don't file now, they may never get another chance.

"A lot of the organizations have been advised by their attorneys to get a thrift application while the getting is good," said Bert Ely, a financial services consultant in Alexandria, Va. "At this moment, a lot of them look upon the thrift charter as a back doorway into the banking business."

A. G. Edwards & Sons Inc. received approval recently from the OTS to operate a savings and loan, and PaineWebber Group Inc., Hartford Financial Services Group Inc., and Ford Motor Co. have applied for charters, said William Fulwider, an OTS spokesman.

According to Legg's application, which was filed Tuesday, Legg Mason Trust Bank FSB would operate out of Baltimore.

Legg would merge its trust company, Legg Mason Trust Co., into the savings and loan, which would then market trust products nationwide, the application said. Legg does not initially plan to sell other products through the savings and loan.

Fulwider said it can take the agency months to approve an application. "We are taking a hard look at these," he said.

Pub Date: 5/14/98

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