FOR IMMEDIATE RELEASE
ICBA, State Groups File Brief in Support of Spencer Bank, S.L.A., a Mutual Institution
Washington, D.C. (May 30, 2008)—ICBA and six state banking groups filed an amicus brief yesterday in the U.S. Court of Appeals for the Third Circuit on behalf of Spencer Bank, S.L.A., a mutual savings and loan association based in Elmwood Park, N.J. Spencer Bank is appealing a decision by the U.S. District Court for the District of New Jersey to dismiss its lawsuit that alleged the shareholder/depositor activist Lawrence Seidman attempted to control Spencer and to secure a position on Spencer's Board of Directors, in violation of the Savings and Loan Holding Company Act.
"The survival of mutual associations is threatened in the current financial markets," said ICBA and the banking groups in the brief. "Many mutual savings associations have converted to stock ownership and some of these conversions have been coerced by parties such as the Appellee-Defendants. With each conversion, fewer and fewer communities and depositors can take advantage of the benefits mutual associations afford."
In the brief, ICBA and the banking groups maintained that Spencer Bank has the right to decide to remain mutual and should have the right to defend that decision by prosecuting a private action in federal court against a group seeking to circumvent that decision. "When, as alleged here, depositors seek to violate federal law in an effort that threatens a mutual association's existence, a private right of action must be implied under the Savings and Loan Holding Company Act to empower Spencer Bank to defend itself against an illegal takeover attempt."
In addition to ICBA, the New Jersey League of Community Bankers, the New York Bankers Association, the Pennsylvania Association of Community Bankers, the Connecticut Bankers Association, the Illinois League of Financial Institutions, and the Indiana Bankers Association joined in the brief. ICBA also filed a position paper last year with the U.S. District Court for the District of New Jersey in support of Spencer Bank.