savings and loan

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Related to Savings and loan associations: savings bank, Thrift institutions, s&ls

savings and loan

n. a banking and lending institution, chartered either by a state or the Federal government. 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 in allowing savings and loans' funds to participate in competition with banks. The result was 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.

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
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On the other hand, under RA 8367, otherwise known as the 'Revised Non-Stock Savings and Loan Association Act of 1997,' a savings and loan association is a 'nonstock, nonprofit corporation engaged in the business of accumulating the savings of its members and using such accumulations for loans to members to service the needs of households by providing long- term financing for home building and development and for personal
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1503 (1991), that an exchange of participation interests in residential mortgages among savings and loan associations led to deductible losses under Regs.
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