In the summer of 1989, both the Congress and the Bush Administration were struggling with the problem of developing an effective and an acceptable solution to the problem which has come to be known as the savings and loan crisis. Hundreds of savings and loan associations were either insolvent, or were in danger of becoming insolvent in the relatively near future (Dentzer, and Plattner, 1989). It was estimated that the sav ings and loan industry, as a whole, was "hemorrhaging at a rate of $10 million to $12 million a day" (Skidmore, 1989, C1).
Eventually, the Congress and the Administration compro mised on a bail out plan for the industry, and created the Resolution Trust Corporation to administer it. As usual, where either the Reagan Administration or the Bush Administration is required to deal with a non national defense issue, rose colored predictions and under funding was the order of the day. The magnitude of the problem was purposefully downplayed, so that the funding package for the plan could fit reasonably com fortably within a Congress/Administration compromise federal budget.
Both the bail out plan and the Resolution Trust Corpora tion soon became croppers. The Bush Administration's appointee to head the Corporation quickly came under fire on charges of
1 2both incompetency and favoritism, and the woeful inadequacy of the estimates of the funding required for the plan soon became apparent. The Bush appointee was forced to resign, and spring 1990 estimates of the cost of the bail out soared to $500 bil lion (Quint, 1990).
Real estate banks first appeared in the south in 1827. The purpose of these early banks was similar to that of the building and loan societies, and other types of thrift institu tions which developed later in the country's history. Today's savings and loan associations are the descendants of the real estate banks, and the building and loan societies.
This current research...