Media Mentions

Steve Johnson Shares his Savings & Loan Expertise with Minneapolis/St. Paul Business Journal


In the Minneapolis/St. Paul Business Journal’s article, “S&Ls Slowly Disappear from Minnesota*,” Lindquist & Vennum’s Steve Johnson was interviewed to offer his perspective on the current decline of active savings & loan institutions. Minnesota's savings and loan institutions outstanding loans on June 30 of this year, $2.65 billion, amounted to less than half of the $5.51 billion that existed just two years before. Successive 20 percent annual drops in the number of active S&Ls — from 25 to 20 to the current 16 — have accelerated the decline.

When asked why the savings-bank industry is shrinking, Johnson explained, “The simple fact is that over the past several years, savings banks have lost several of the unique advantages they once enjoyed, and now frequently find themselves at a disadvantage to their commercial-bank competitors. This process accelerated with Dodd Frank. For example, before Dodd Frank, savings banks had unique powers to branch across state lines, but now all banks can do so.”

When asked why so many of Minnesota's S&Ls are headquartered outside the Twin Cities, Johnson responded, “The Twin Cities lost several savings banks during the S&L crisis in the 1980s, including Midwest Federal, First Federal, First Minnesota and Hennepin Federal. It never regained those charters. The new banks that were formed in the mid- and late-1990s opted for commercial bank charters, which were more profitable. We're not seeing much growth, even at active S&Ls. By contrast, nearly all of the institutions on The List: Credit Unions, which the Business Journal published Aug. 2, were growing both assets and net income. Are S&Ls doomed? Most likely they will continue to fade away for the reasons outlined above. By contrast, credit unions continue to have their own federal regulator — and industry spokesman, the NCUA (National Credit Union Administration) — significant political clout and, of course, a unique tax advantage, insofar as they are not generally subject to income taxes.”

*Full article available by subscription only.

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