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Ideal Federal Savings Bank et al. v. Madeline Murphy et al. - No. 1, 1995 Term SAVINGS AND LOAN ASSOCIATION - Dispute over election of directors of federally-chartered savings and loan governed by federal law and charter interpretation of federal regulatory agency, not Maryland statute.

IN THE COURT OF APPEALS OF MARYLAND No. 1 September Term, 1995 ___________________________________

IDEAL FEDERAL SAVINGS BANK et al. v. MADELINE MURPHY et al.

___________________________________

Murphy, C.J. Eldridge Rodowsky Chasanow Karwacki Raker McAuliffe, John F. (retired, specially assigned) JJ. ___________________________________ Opinion by Chasanow, J. ___________________________________

Filed:

August 25, 1995

The issue we must resolve in the instant case is whether the Court of Special Appeals erred in holding invalid, as against Maryland public policy, an election of directors for a federallychartered savings and loan institution where members were required to vote "for" or "against" each candidate. In the election at

issue, there were only ten candidates nominated for the 15 director vacancies and four of those candidates were declared not elected when they received more "against" votes than "for" votes. We must

reverse the intermediate appellate court because even if there is a Maryland legislative policy disfavoring "negative" voting, it would not be applicable to this election for directors of a federally-chartered institution. The overseeing federal regulatory

agency's interpretation of its federal charter form provision as precluding a plurality vote for directors and permitting "for" and "against" votes preempts any Maryland statutory provision which may be to the contrary.

I. Prior to April 6, 1987, Ideal Federal Savings Bank (Ideal) had been a state-chartered, savings institution. Because of the

savings and loan crisis in Maryland in the mid-80's, Ideal was required to obtain a federal charter and federal insurance in order to remain in business. Ideal's charter and bylaws were adopted

from the form for charters and bylaws for federal mutual savings associations found in Title 12 of the Code of Federal Regulations

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Maryland Law