J. MILLARD TAWES, GOVERNOR 311

The arrival at what I consider the proper stand to take on House
Bill No. 93, which amends the present law pertaining to "Building,
Homestead and/or Savings and Loan Associations" in this State, has
presented one of the most difficult decisions I have been called upon to
make with regard to legislative enactments. The dilemma which con-
fronts me is created on the one hand by my acute awareness of the
criticism directed against this State and its lack of appropriate regula-
tion of savings and loan associations and, on the other hand, by my
considered conviction that this legislation represents neither an ade-
quate answer to this criticism nor a proper approach to the problem
with which we are faced.

I, along with members of my staff, have devoted a great deal of time,
not only to analyzing the provisions of House Bill No. 93 and the able
arguments presented by its proponents and opponents at the hearing
conducted by me last week, but also to the study of the background
and nature of the building and loan industry in the State and particu-
larly in Baltimore City where the greatest number of these associations
operate.

As a result of the study that has been made, I conclude that the vast
majority of the many State-chartered associations, ofttimes char-
acterized as "neighborhood" associations, are conducted by responsible
citizens of our State who, in many instances, give of their time and
talents for nominal remuneration and, by so doing, perform a much-
needed service to the communities in which they live.

I must further conclude from information which has come to my
attention and from certain complaints referred to at the public hear-
ing, that there are some organizations constituting a small minority
which, within recent time, have sought to take advantage through
specious means of the splendid reputation and the badge of integrity
which this industry has earned through many years of prudent
management.

In vetoing this bill I am not oblivious to, nor do I minimize the
possible harm that these organizations may bring to their members.
This possible harm must be weighed against any potential hardships
and inequities which the provisions of this bill would work upon the
majority of the savings and loan associations that are being operated
in a proper and ethical fashion.

The aspect of this bill that is most objectionable to me is that it does
not accomplish the purpose for which it was primarily designed. The
bill's primary purpose is to establish regulations and supervision
under which the building and loan industry must operate. Under the
bill the State Department of Assessments and Taxation is the agency
responsible for the administration of the law and for the supervision
of the industry, but except for setting down the requirements which
must be met by an organization in order to obtain a certificate of
incorporation, there are no clear-cut directions, guides, standards, or
rules for the Department to follow. Nor is there any authority granted
the Department for enforcing the law. After the issuance of the certifi-
cate of incorporation, the positive jurisdiction and regulatory role of
the Department is extremely vague and doubtful and, for practical
purposes, its effectiveness seems to come to a dead end.

Within the framework of the present administrative structure, the
frustration that would be facing the Department would be exceeded