Major Savings and Loan, located primarily at Gilbert and Lincoln Avenues, was the longest-lived African American Savings and Loan in Cincinnati, operating from 1921 until 1986. Savings and Loans, earlier called Building and Loans, were the primary savings institutions for most people, and the source of most mortgage loans, during the middle half of the twentieth century, until bank deregulation and inflation squeezed the institutions and drove most to failure in the 1980’s.
Walnut Hills in fact boasted two Black-owned Savings and Loans. Horace Sudduth’s Industrial Building and Loan, founded in 1920, had an office in Walnut Hills from the 1920’s until the time of Sudduth’s death in the 1950’s. Sudduth saw to the conversion of the bank’s charter from State to Federal regulation in 1952, allowing FDIC insurance on deposits. Major Lee Zeigler, a Black businessman who arrived in the West End around 1900, founded Major Savings and Loan in 1921. Major Savings and Loan also converted from State to Federal Charter in the 1950’s. After Sudduth’s death, Major Federal Savings and Loan took over the Industrial Building and Loan. For a time, the institution operated as Major Industrial Federal Savings and Loan.
In 1947 Major Lee Zeigler hired Pauline Allen, later Pauline Allen Strayhorne, as a clerk. Strayhorne rose quickly at the small bank; she took over as the managing officer in 1952. The founder’s great nephew Ralph Zeigler eventually became the president and chair of the board, but Strayhorne continued to run the operation until it closed in 1986. Her customer base was 95% Black, and the bulk of her lending went to people buying houses. Strayhorne scrutinized her mortgages carefully; in 1983, she claimed that over her long career as manager, Major Federal lost only $25,000 on foreclosed properties. She acknowledged that her reputation for strict enforcement of mortgage terms – she told her borrowers she would initiate foreclosure if they were more than 30 days delinquent in payments – made her unpopular with parts of the community. On the other hand, in the recession year of 1981, Major Federal was the most profitable Savings and Loan of its size in the state of Ohio.
Beginning in the mid 1970’s, Major Federal also used some of its assets to invest directly in Walnut Hills real estate, and in some commercial lending projects. Strayhorne also wrote mortgages for Black churches. In 1975, Major Federal opened a branch in the Black-governed suburb of Lincoln Heights, and invested in an industrial park there. Yet Strayhorne lamented in the later years of Major Federal, “We still have a large group of black professionals who think it makes them a big person when they can take their money Downtown. I don’t know how you get to those people.”
For years, Major Federal advertised as a member of the American Savings and Loan League, an association of S&Ls owned by Blacks and other minorities, using the slogan “Declare your economic independence. Deposit in a Black Owned Savings and Loan.” Black-owned Savings and Loans serving Black buyers played an especially key role in the period from the 1930’s through the 1960’s when the Federal Housing Administration encouraged the practice of “red lining” – designating certain neighborhoods as declining or blighted, and therefore unsafe for mortgage lending. The presence of African Americans in a neighborhood officially marked it as declining or blighted. This Federal standard justified the practice of denying loans both to all potential buyers in integrated neighborhoods, and to Black buyers in all neighborhoods. These restrictions, well documented but largely ignored by the white press, had devastating effects on home ownership and family wealth in the African American community for two generations, still reflected in the US to this day. (Redlining of course continued and continues as an informal practice long after it was made illegal by the Fair Housing Act of 1968.) Perhaps the Major Federal and Industrial Savings and Loans allowed some African Americans to buy the houses they could afford in integrated Walnut Hills.