Savings and loan associations still exist, but have been tainted by the late 1980s S&L crisis. Today's savings and loans are similar to commercial banks. Knowing about the failures of U.S. financial institutions can help you be a wary investor.
During the 1980s and 1990s, hundreds of savings and loans failed. This great failure cost the government and individuals billions of dollars.
The Clintons had some business dealings with the Whitewater Development Corporation and were called to testify during the investigation of Whitewater.
The purpose was to help grow communities. Started in England during the 18th century, the concept was for local investors to pool funds to help enable others to pay for building costs.
Building and loan associations were similar to savings and loans.
During the 1930s, many banking and loan associations failed.
Usually the depositors in savings and loan associations also own stock, and if the savings and loan makes a profit so do the stock owner. Bank depositors do not own stock in the bank.
Rising interest rates took a toll on savings and loans.
FDR signed the 1933 Emergency Banking Bill.
$519 billion was the combined worth of the failure.
Charles Keating was head of the Lincoln Savings and Loan Association.
John McCain was involved in the Keating Five, he accepted campaign donations from Charles Keating.
The savings and loans were insured by the Federal Savings and Loan Insurance Corporation.
Today's savings and loans operate like commercial banks and are closely regulated and supervised.
The Keating Five was a group of five senators who accepted campaign contributions from Charles Keating. Claims were made that the campaign donations had an impact on the senators' decisions regarding savings and loan association policies.
The purpose of deregulation was to allow savings and loans the opportunity to pursue other business ventures, so those profits would offset losses due to rising interest rates.
High-risk and high-cost real estate investments were popular with many savings and loans.
The Tax Reform Act of 1981 created many incentives for real estate investors.
The Depository Institutions Deregulation and Monetary Control Act of 1980 revoked the restrictions of the savings and loan associations.
It was during the 1960s when rising interest rates started to create issues for savings and loan associations.
The federal government used taxpayer money to bailout the savings and loans. The cost of the bailout was estimated to be $153 billion.