DeKALB – In the 1946 Christmas classic “It’s a Wonderful Life,” greedy banker Henry F. Potter attempts to dissolve the Bailey Building & Loan, viewing the company as a competitor.
DeKalb author Tom Pisapia’s book, “Pottersville: Where is the Bailey Building and Loan?”, published in November 2017 by Dorrance Publishing Co., explains that what almost happened in “It’s a Wonderful Life” actually occurred in real life: banks caused the downfall of the savings and loan industry.
Pisapia, a 1973 Northern Illinois University graduate, began his finance career at the First Savings and Loan Association of Sycamore in 1976. Through the years, Pisapia has worked for Fannie Mae, Merrill Lynch Capital, the Federal Home Loan Bank and the FDIC/RTC.
Pisapia met with MidWeek reporter Katrina Milton to discuss his book, his career in finance and how banks caused the downfall of the savings and loan industry.
Milton: Are you originally from the DeKalb area?
Pisapia: I’m originally from Chicago, but after 36 years, I’m back in DeKalb. I first came to DeKalb to get my undergraduate degree in 1968, and I stayed here for 14 years. After graduating college, I was out of work when I got a call from the president of the savings and loan in Sycamore. At the time, I wasn’t thinking of a career in finance, not at all. I had a major in psychology and a minor in business administration, but I learned a lot on the job. I ended up taking courses and later became a teacher.
Milton: What were some of your other financial roles?
Pisapia: I’ve had a number of positions and roles throughout my career in finance. At one point, I was working on the 55th floor of the Sears Tower for Merrill Lynch Capital Markets. I had to take two elevators up to the trading floor. It was a little different from the little savings and loan on DeKalb Avenue in Sycamore, especially during my monthly trips to Merrill’s New York offices. I truly went from Main Street to Wall Street.
Milton: What led to the downfall of savings and loans?
Pisapia: In real life, the greedy bankers like Mr. Potter in the film “It’s a Wonderful Life” did close down the savings and loan industry. An entire industry was run out of business because bankers perceived them as competition. The bankers had a lot of political clout and orchestrated regulations that made it impossible for the savings and loans to survive. That process started in the ‘80s and was fairly well completed by the early to mid ‘90s. Now the industry is gone.
Milton: What led to you becoming an author?
Pisapia: The ironic part is that my career went full circle, in the end I was a hired gun for the FDIC out of New York and liquidated over $17 billion of the savings and loans’ capital markets assets. First I worked with the savings and loans, learned all about them, tried to save them and then ended up being a part of closing them down. After working with the FDIC and Resolution Trust Corp. in Florida, I went to Wisconsin. In Wisconsin, I went to a cabin and wrote the bones of the book during the winter of 1992 and 1993. I kept the book to myself for 20 years because I was still working in the industry, either with or for banks. Once I retired and left the banking world, I updated the book and had it published. The book was published November 2017 by Dorrance Publishing Co. out of Pittsburgh.
Milton: Why did you write the book?
Pisapia: It was a story that had to be told. Before publication, I had my mentor, Gordon Carlson of the savings and loan in Sycamore, read the book. He read the book and liked it. He was happy that I told the real story of what happened. He was also honored that I would dedicate the book to him. He is my teacher, mentor and good friend. There’s actually a story in the book about me working at a desk in front of his office for six months as I took classes and learned more about the savings and loan industry.
Milton: How would you describe what savings and loans did?
Pisapia: If you Googled savings and loans, you would see crazy articles about scandals and corruption. That’s not what savings and loans were all about. They were putting working-class people into affordable long-term financing to buy houses. That was important because banks didn’t want to do that at the time. Banks dealt with business and corporate loans. Helping working-class people get houses, with a long-term, fixed-rate mortgages, was not in their interests.
Milton: How did savings and loans help people?
Pisapia: With an affordable mortgage, people bought homes. Then they created schools and roads and hospitals. That one house became two houses, three houses, then a subdivision. Then there were blocks and blocks and cities created. The new houses created wealth and a tax base and helped the economy. Savings and loans contributed more to the American way of life than any bank had done or has done even up ‘til today.
Milton: What is different about today’s market?
Pisapia: Credit today is quite a bit different. Credit is readily available. Back in the day, people would save up money to purchase a house, maybe take out a small mortgage, if they could find one. Now, there’s available credit. You can buy a house with as little as 5 percent down.
Milton: Why was it important for you to write the book?
Pisapia: I don’t want savings and loans to be forgotten. They created the path of home ownership for working-class people. Banks and bankers had a long-term impact, eliminating an entire industry that helped finance the American dream. There was absolutely no need to put savings and loans out of business.
Milton: What do you think people should know about savings and loans?
Pisapia: Don’t take for granted that mortgages and loans have always been there. There would be no path to mortgages and home ownership without savings and loans. Banks were never going to do that. Banks drove savings and loans out of business because they were deemed a threat.
Milton: Why reference “It’s a Wonderful Life” in the book’s title?
Pisapia: It was a perfect analogy and it was easy to do. In real life, Mr. Potter wins. The building and loans went out of business. What might have happened in the movie actually occurred in real life. The movie came out in 1946, but it came to life in the 1980s and 1990s. The movie tells a great story, it’s so much more than a Christmas classic. It’s just pathetic that years later, what happened in the movie really is what came to pass.