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Essay / Research Paper Abstract
A 5 page paper. Savings and Loans Associations fall under different regulations than commercial banks. This essay provides an overview of this type of financial institution and briefly discusses the problems in the 1980s and the reasons for the collapse of so many of these institutions. Bibliography lists 7 sources. wps
Page Count:
5 pages (~225 words per page)
File: MM12_PGSL.rtf
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Unformatted sample text from the term paper:
AND LOANS ASSOCIATIONS For The PaperStore, November 2000 properly! A savings and loan association is a
financial institution that was originally designed to accept savings from private investors and provide home mortgage services to the public. The first U.S. savings and loan association was founded in
1831. It was more than a hundred years later, in 1932, that the Federal Home Loan Bank System was created to supervise these institutions. The System also provided for deposits
to be insured by the Federal Savings and Loan Insurance Corporation (FSLIC). The federal government began to charter savings and loans associations in 1933 but these institutions are not required
to hold a federal charter. Savings and loans associations began to expand significantly after World War II. These financial institutions have been able to be organized in two manners:
as a mutual or a capital stock institution. A mutual organization would be similar in terms of operation to a mutual savings bank. There have been numerous changes in recent
years as a result of deregulatory measures that were enacted in the 1980s. The Depository Institutions Deregulation and Monetary Control Act of 1980 allowed these institutions to engage in other
businesses, such as commercial lending, trust services and non-mortgage consumer lending. Deposit insurance was raised from $40,000 to $100,000, which encouraged savings and loans associations to enter into much riskier
loans than previously. The Depository Institutions Act in 1982 gave these financial institutions even more latitude. They were allowed to make both secured and unsecured loans to a broad
range of markets. It also allowed developers to own savings and loans associations and further allowed the owners to issue loans to themselves. This law gave the Federal Home Loan
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