Financial Institutions Reform, Recovery and Enforcement Act of 1989
As a result of the savings and loan crisis, Congress passed the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) which dramatically changed the savings and loan industry and its federal regulation. The highlights of the legislation, signed into law August 9, 1989, were:
- The Federal Home Loan Bank Board (FHLBB) and the Federal Savings and Loan Insurance Corporation (FSLIC) were abolished.
- The Office of Thrift Supervision (OTS), a bureau of the United States Treasury Department, was created to charter, regulate, examine, and supervise savings institutions.
- The Federal Housing Finance Board (FHFB) was created as an independent agency to replace the FHLBB, i.e. to oversee the 12 Federal Home Loan Banks (also called district banks) that represent the largest collective source of home mortgage and community credit in the United States.
- The Savings Association Insurance Fund (SAIF) replaced the FSLIC as an ongoing insurance fund for thrift institutions (like the FDIC, the FSLIC was a permanent corporation that insured savings and loan accounts up to $100,000). SAIF is administered by the Federal Deposit Insurance Corp.
- The Resolution Trust Corporation (RTC) was established to dispose of failed thrift institutions taken over by regulators after January 1, 1989. The RTC will make insured deposits at those institutions available to their customers.
- FIRREA gives both Freddie Mac and Fannie Mae additional responsibility to support mortgages for low- and moderate-income families.
Read more about this topic: Savings And Loan Crisis
Famous quotes containing the words financial, institutions, recovery and/or act:
“What people don’t realize is that intimacy has its conventions as well as ordinary social intercourse. There are three cardinal rules—don’t take somebody else’s boyfriend unless you’ve been specifically invited to do so, don’t take a drink without being asked, and keep a scrupulous accounting in financial matters.”
—W.H. (Wystan Hugh)
“You may melt your metals and cast them into the most beautiful moulds you can; they will never excite me like the forms which this molten earth flows out into. And not only it, but the institutions upon it are plastic like clay in the hands of the potter.”
—Henry David Thoreau (1817–1862)
“With any recovery from morbidity there must go a certain healthy humiliation.”
—Gilbert Keith Chesterton (1874–1936)
“What distinguishes the majority of men from the few is their inability to act according to their beliefs.”
—Henry Miller (1891–1980)