Dwelling House Saving and Loan Response to the Urban Redevelopment Decision

Dwelling House Savings and Loan Organization is seeking to increase its reserve by $2 million to become eligible to be fully insured by the Federal Savings and Loan Insurance Corporation (FSLIC). Recently, Dwelling House Savings and Loan experienced a drop in consumer saving, increase in loans allocation, and a spike in loan delinquency. As one of the only bank that offers residents of the Hill District mortgage services, Dwelling House is dealing with the aftermath of the financial crisis that affected the Hill community because of the city’s council decision to revitalize the Lower Hill District. As a result of this project, many residents were displaced from their homes and businesses. The situation caused most residents to lose their source of income and the ability to keep up with their mortgage payment. With a sudden increase in the number of default loans, to protect their depositor's funds and their banking operations, Dwelling House Savings Loan needs to be fully insured by the Federal Savings and Loan Insurance Corporation (FSLIC). Getting the FSLIC status will mean that management will have to make the difficult decision whether to keep operating as a community bank or change their banking strategy to align with that of other traditional banks.