The 12-year-old consumer loan corporation is owned by three thrifts in the Baltimore area. Its four-person office is one floor above those of one of its owners, Heritage Savings Bank. The arrangement is unusual, and it works. "Individually, it was too costly to set up our own departments," said John E. Lufburrow, president of Heritage Savings, an $86 million-asset thrift in Lutherville. "So we decided to get together. "I've talked to others about this, and to my knowledge, no one else has successfully done this." To be sure, thrifts and banks have formed consortiums in recent years, most commonly to share back-office expenses and data processing tasks. But observers could recall few other instances where thrifts have joined forces to form a consumer loan subsidiary, especially one that has succeeded for this long. The corporation's three owners, Bradford Federal Savings Bank, Harbor Federal Savings Bank, and Heritage gain primarily by being able to claim they are truly "full-service" institutions, something not all thrifts can legitimately state. The presidents of the thrifts, who serve as the directors of Cash Inc., also tout the subsidiary as an inexpensive way to go after consumer loans, primarily for automobiles, boats, and smaller purchases. Last month, Cash Inc. had $11.6 million in outstanding loans. By joining forces, the three thrifts can also reach more potential customers through their combined network of 15 branches, they said. Cash Inc. is well advertised in all of the branches. An interested customer fills out an application at the branch and is then referred to the subsidiary. "We would not be doing this other than the way we are doing it now," said Robert A. Williams, president of $154 million-asset Harbor Federal. "We found this much more economically feasible to handle through one organization." And, as Mr. Lufburrow pointed out, the shared setup allows the thrifts to make loans that might normally be too risky for one of them to make, since they share in both the losses and the gains of the enterprise. Observers said the biggest obstacles to such efforts are the so-called social issues - how to keep the egos of rival chief executives in check so that they can work together. The three Baltimore thrifts - all within five miles of each other - still battle each other for every customer, and even compete within Cash Inc. But they recognize the greater benefit of cooperation as well, they say. "We're competitors, not enemies," Mr. Lufburrow said. A referral from a branch of one of the thrifts does not translate into more profit for that thrift, but nevertheless, each institution is informed monthly on which one has brought in the most customers for Cash Inc. The information is designed to get the competitive juices flowing. "I thought it was going to cause a lot more problems than it did," said Howard J. Rousseau, president and a director of Cash Inc., referring to the joint ownership. "It was my biggest concern, and still is sometimes. But they all know each other and realize they're not working against each other." The corporation was formed in the winter of 1983, just months after Congress passed historic legislation deregulating the thrift industry. The founding thrifts, which included Heritage, Harbor, and two others that no longer exist (Bradford was brought in later), each bought an equal amount of the stock for $25,000. They were motivated in part by federal regulations that forbid a thrift from investing more than 3% of its assets in a service subsidiary. Since Heritage and the others were much smaller then, the restriction would not make their own subsidiaries worthwhile. Together, however, they could achieve some mass. When Cash Inc. needs cash, it borrows equally from each of the thrifts at an 8% rate, well above the market rate. Harbor Federal handles the payment processing, and Heritage does the checking accounts. Mr. Rousseau and his three employees do the rest.

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