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Unformatted text preview: to the Federal Home Loan Bank system.
5-10 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 5: GOVERNMENT PARTICIPATION & BACKED LOANS
Federal Savings and Loan Associations – These were authorized by the Home Owners' Loan Act of 1933, which set the guidelines to obtain a federal charter. State Savings and Loan Associations – These are supervised by the State Savings and Loan Commissioner. Structure of S&Ls – Most S&Ls are corporations. Owners hold shares of stock. Stockholders' investments are used to pay operating losses but depositors' investments are not. There are also mutual organizations, in which depositors are the investors and owners, sharing expenses, losses and profits. INSURANCE
The Federal Savings and Loan Insurance Corporation (FSLIC), created by the National Housing Act of 1934, insures savings and loan associations as the FDIC insures banks. Required for Federal S&Ls – All federally chartered savings and loan associations are required to insure their accounts. State S&Ls – State chartered associations may join, providing they are FSLIC accepted by proving financial and management stability. Premiums – Savings and loan associations pay a premium for the insurance based on a percentage of their deposits. Amount Insured – All depositors' accounts are insured to $100,000. THE FINANCIAL INSTITUTIONS REFORM, RECOVERY AND ENFORCEMENT ACT OF 1989 (FIRREA)
On August 9, 1989, FIRREA was signed into law to reform, recapitalize and consolidate the Federal Deposit Insurance system and to enhance the organizational and enforcement powers of the federal agencies regulating financial institutions. This action was taken in response to the failure of numerous savings and banking organizations and was an attempt to preserve the integrity of the U.S. banking system. Under Title I, Section 101 of the Act, its purposes are enumerated as follows:
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10