Tuesday, March 31, 2009

1.The term savings association has replaced S&L to capture the change in the structure of the industry. In 1978, The Federal Home Loan Bank Board (FHLBB), at the time the main regulator of savings associations, began chartering federal savings banks insured by the Federal Savings and Loan Insurance Corporation (FSLIC). In 1982, the FHLBB allowed S&Ls to convert to federal savings banks, the title associated with this sector of the thrift industry was revised to reflect this change.

2. In the 1970s, these Regulation Q ceilings were usually set at rates of 5 ¼ or 5 ½ percent.
Net Interest Margin
Interest income minus interest expense divided by earning assets.
Disintermediation
Withdrawal of deposits from depository institutions to be reinvested elsewhere, e.g., money market mutual funds.
Regulation Q ceiling
An interest ceiling imposed on small savings and time deposits at banks and thrifts until 1986.

Regulator forbearance
A policy not to close economically insolvent FIs, allowing them to continue in operation.
Savings institutions
Savings associations and savings banks combined.

3. At the time of its dissolution in 1995, the RTC had resolved or closed more than 700 savings associations and savings banks at an estimated cost of $200 billion to U.S. taxpayers.
QTL test
Qualified thrift lender test that sets a floor on the mortgage related assets that thrifts can hold (currently, 65 percent).
4. The major enterprises are GNMA, FNMA, and FHLMC.
5. Failure to meet the 65 percent QTL test results in the loss of certain tax advantages and the ability to obtain Federal Home Loan Bank advances (loans).
6. The Federal Home Loan Bank System, established in 1932, consists of 12 regional Federal Home Loan Banks (set up to the Federal Reserve Bank system) that borrow funds in the national capital markets and use these funds to make loans to savings associations that are members of the Federal Home Loan Bank. The Federal Home Loan Banks are supervised by the Federal Home Loan Bank Board.

The Office of Thrift Supervision. Established in 1989 under the FIRREA, this office charters and examines all federal savings institutions. It also supervises the holding companies of savings institutions.
The FDIC. The FDIC oversees and managers the Savings Association Insurance Fund (SAIF), which was established in 1989 under the FIRREA in the weak of FSLIC insolvency. The SAIF provides insurance coverage for savings associations. Savings banks are insured under the FDIC’s Bank Insurance Fund (BIF) and are thus also subject to supervision and examination by the FDIC.
Other Regulators. State chartered savings institutions are regulated by state agencies—for example, the Office of Banks and Real Estate in Illinois—rather than the OTS.

7. The sharp drop in ROA and ROE in 1996 was the result of a $3.5 billion special assessment on SAIF deposits. Without these one-time charges, ROA would have been 0.89 percent rather than the – 0.02 percent in Figure 12-5, while ROE would have been 10.36 percent rather than – 0.26 percent.
8. Behind Travelers Group/Citicorp ($74 billion), and BaneOne/First Chicago NBD ($30 billion).

9. Ownership in corporate credit unions is represented by the deposit accounts of their member credit unions, with each member having equal voting rights.

10. AWANE is a trade association of companies that serve the automotive aftermarket through sales of auto parts and other items. It is the association member companies and firms related to the automotive business, as well as their owners and employees, that AWANE Credit Union serves through its common bond.

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