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 allowing their 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.
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