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Thousands Wait to Withdraw Money Before Thrift Closes for Good

December 16, 1990

PATERSON, N.J. (AP) _ Thousands of people lined up Saturday in sleet and snow to snatch their savings from the first thrift in New Jersey since 1969 ordered to return deposits.

Some in line had waited overnight at United Savings Bank.

Federal regulators seized the thrift in May, citing poor management, improper loan documentation, risky interest rates, unsafe real estate loans and excessively high salaries.

Resolution Trust Corp., the federal agency that manages ailing thrifts, closed the 49-year-old United Savings without warning Thursday night.

″I made a deposit Wednesday and nobody said anything,″ said Regina Ellerbee, 36, of Paterson.

Resolution Trust spokeswoman Andrea Plater said nobody should have been surprised.

″They knew it was a troubled institution and the government was trying to close it,″ she said. ″Customers knew we were trying to find a buyer.″

Former United president Donald J. Moskowitz pleaded guilty in September to defrauding the thrift of about $2.5 million. In November, former controller Ronald Rudd pleaded guilty to federal bank-fraud charges.

Paterson police estimated more than 2,000 people waited to take their turn at United’s main office.

The thrift’s branches in Parsippany-Troy Hills, Succasunna and Bricktown were also returning customer deposits. Refunds will continue next week. Friday, the thrift will mail checks to depositors who have not claimed their money.

″Ronald Reagan should be here,″ said Paterson Mayor Bill Pascrell Jr., insisting that the former president’s deregulation policies led to the savings and loans crisis.

He said it was wrong for the thrift to close just before Christmas.

Plater said keeping United Savings open would have been too expensive. The collapse of the thrift is expected to cost taxpayers about $24.5 million, she said.

Selling the thrift was impossible, she said, noting that more than 680 solicitations failed to bring a single bid.

The thrift has 32,300 accounts on record, with total deposits of $183.4 million.

Plater said officials have so far identified 11 accounts in excess of $100,000, the maximum sum insured by the federal government. The amount over $100,000 will be partly reimbursed through sale of the thrift’s assets, but it was not known how much depositors will be able to recover, she said.

Depositor Evelyn Lipscomb, 41, said she will be choosier about who to trust with her money.

″I’m going federal,‴ she said. ″No more savings and loans.″

Said 26-year-old Alex Robles: ″Our best friend is the mattress from now on.″

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