Business, Legal & Accounting Glossary
Savings and loans only make loans secured by real property from deposits, upon which they pay interest slightly higher than that paid by most banks.
In the early 1980s, savings and loans were “de-regulated,” allowing them to make loans for speculative land development, removing high reserve funds requirements, and allowing their funds to participate in competition with banks. The result was the use of many savings and loans for speculative and dishonest investments, lack of controls and tremendous losses to thousands of depositors. However, a properly managed, conservative savings and loan which concentrates on real estate loans guaranteed by the FHA (Federal Housing Administration) and/or sold in the secondary mortgage market can be safe, profitable and provide a valuable channel for savings into the home finance market.
n. a banking and lending institution, chartered either by a state or the federal government.
A savings and loan is very similar to a commercial bank. It’s a financial institution that accepts deposits from individuals and loans the money out to borrowers.
Savings and loan institutions date back to the mid-19th century in America. They were founded by communities to enable residents to purchase homes. The Great Depression took a toll on the S&Ls, of course, but they recovered after World War II when returning veterans fueled a boom in home buying.
Savings and loans crisis
Thrift institution
Savings bank
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This glossary post was last updated: 28th November, 2021 | 0 Views.