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The thrift industry

The thrift industry has undergone significant changes during the 1980s and early 1990s. Once a highly regulated industry, deregulation during the 1980s brought about a new era of competition and consolidation in the industry that has resulted in widespread changes in the way that banks and savings and loans conduct their operations. This research examines the new environment in which financial institutions operate, and considers the specific ramifications on one institution in particular.

The late 1980s were dominated by the failure of many financial institutions in the savings and loan crisis. There was increased demand by the public for greater regulation of an industry which, once deregulated, had engaged in speculative investment practices and other activities which led to widespread failure. Since taxpayers are ultimately responsible for guaranteeing the deposits of failed institutions, greater emphasis was placed on creating an environment in which institutions would not put their depositors' funds at such great risk.

The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) was a response to the many savings and loan failures during the 1980s. Under FIRREA, the Federal Home Loan Bank Board was disbanded with the regulatory role it provided taken over by the new Office of Thrift Supervision, part of the Treasury Department. The supervisory role that the Board provided is now handled by the Federal Housing Finance Board. The Federal Savings and Loan Insurance Corporation (FSLIC) was replaced by the Savings Association Insurance Fund, and administrative control is now handled by the Federal Deposit Insurance Corporation (FDIC).

For those institutions which survived, the end of the 1980s offered significant opportunities as well as challenges. As the federal government stepped in and took over failed institutions, customers from those institutions had to turn to other thrifts for their busin...

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The thrift industry. (1969, December 31). In LotsofEssays.com. Retrieved 05:50, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1709165.html