Bar Ass'n of Balto. City v. Snyder

Singley, J., delivered the opinion of the Court. In October, 1971, Alvin I. Snyder, former president and chairman of the board of Uptown Federal Savings and Loan Association (Uptown) and a member of the Maryland bar since 1950, was indicted under -a four count indictment, returned by the grand jury to the United States District Court for the District of Maryland. He entered pleas of nolo contendere to counts two and four, which had charged him respectively with violation of 18 U.S.C. §§ 1006 (1961) and 2 (1951) (receiving money from a federal savings and loan association with intent to defraud; aiding and abetting) and ⁵³⁵ of 18 U.S.C. §§ 1001 (1948) and 2 (1951) (making a false statement of material fact in a statement to a government agency, the Federal Home Loan Bank Board; aiding and abetting). Synder was fined $10,000.00.

On 30 May 1974, The Bar Association of Baltimore City filed in this Court a petition charging Snyder with professional misconduct and seeking disciplinary action. We referred the petition, pursuant to Maryland Rule BV3 b, to a panel of three judges of the Eighth Judicial Circuit, Judges Charles D. Harris, J. Harold Grady and David Ross, for hearing and recommendation. The matter came on for hearing on a stipulation of facts, supplemented by Snyder’s testimony, which can be briefly summarized. Our usury law, Maryland Code (1957, 1972 Repl.

Vol.) Art. 49, §§ 1-11 was substantially revised by Chapter 453 of the Laws of 1968, effective 1 July 1968. Particularly significant is the definition of interest contained in § 1 and the establishment of a maximum interest rate of 8% by § 3. 1 After our decision in B. F. Saul Co. v. West End Park, 250 Md. 707, 727-28 , 246 A. 2d 591, 603-04 (1968), holding that fees and charges retained by the lender must be included in the computation of the rate of interest, it was no longer possible for Uptown Federal to retain charges made for credit reports and appraisals in cases where a borrower was being charged 8% interest. Snyder, as president and chairman of the board of Uptown; Joseph Sussman and David Janofsky, vice presidents of Uptown, and Martin Gilbert, Uptown’s secretary, arranged to route fees charged for appraisals and credit reports required for certain loans to Perry Klein Associates, Inc. (Klein), a real estate company. 2 Borrowers were charged sums ranging from $60.00 to $85.00 for appraisals and credit reports, and made their checks payable to Klein. Klein would then order a credit report at an average cost of $7.50 and arrange for an appraisal at an average cost ⁵³⁶ of $40.00.

It retained a fee of $2.00, later increased to $3.00 for each application, and accumulated the balance which was to be divided as follows: Snyder, 75%; Sussman, 15%; Janofsky and Gilbert, 5% each. In December, 1968, $7,500.00 was divided in this fashion and an additional amount of $9,478.00 was disbursed in December, 1969. Snyder’s share was paid by Klein, at Snyder’s direction, to Snyder’s brother. The receipt of these payments was not disclosed to the other directors, nor was there a disclosure on the officer’s questionnaire Snyder was required to submit annually in connection with Federal