Word: thrift
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These operators were not on the scene in 1956 when Denver builder Franklin Burns, cashing in on the postwar housing boom made possible by the GI Bill, set up a friendly little thrift that eventually became Mile High Savings and Loan. He was doing just what Congress had envisioned when it carved out a role for S&Ls in the early 1930s. Limited by law to making home loans and earning the narrow profit margins provided by a relatively stable real estate market, Mile High was helping propel the great American Dream of home ownership for everyone...
When the small thrift ran into trouble during the inflationary climate of the mid-1970s, it was taken over by Denver businessman James Metz, who saw the sleepy S&L as the future flagship of a financial empire. He named himself chairman and hired Wise, an S&L marketing whiz from Columbia Savings in Kansas, to run the company. The nattily dressed Wise wasted no time in transforming Mile High's small-town image. He launched an ambitious expansion drive, unveiled plans for a glass-and-steel headquarters downtown, and renamed the company Silverado, evoking the dreams of prospectors...
...late 1970s and early '80s, thrifts were struggling under the old rules because of inflation. Forced to pay high rates to attract deposits but dependent on low-interest, long-term home loans for revenue, the S&Ls saw their profits erode. Under constant pressure from thrift lobbyists, the old rules were felled one by one: in 1980 federal deposit insurance was increased from $40,000 to $100,000, money brokers were allowed to bundle massive deposits and thrifts were freed to make commercial loans...
...including Brownstein, mysteriously managed to sell much of their personal M.D.C. stock at its peak price. The lawsuits also contend that Milken was the architect of a scheme in which M.D.C. sold junk bonds to San Diego's Imperial S&L, which eventually produced huge losses for the California thrift...
...despite the constant barrage of denials, inventive legal interpretations and outside expert opinions lofted by Wise and his officers, state and federal examiners had compiled a disturbing account of Silverado misdeeds. But Silverado seemed to be leading a charmed life: the thrift was merely warned about its wayward banking methods and allowed to keep operating...