Quotes About S&Ls

And so, when more than 1900 S&L's went belly-up in the Great Depression, Herbert Hoover—and a most willing Congress—created the Federal Home Loan Bank Board to protect depositors in the future.

The weakest S&L's paid the highest interest rates to attract depositors and they are the ones which obtained the large blocks of brokered funds. Brokers no longer cared how weak the operation was, because the funds were fully insured. They just cared about the interest rate. On the other hand

Some S&Ls bet their depositors' money on highly dubious projects. Many simply stole it, as if deregulation meant that the law no longer applied to them.

The S&Ls were simultaneously losing money on long-term fixed-rate mortgages, because of inflation, and haemorrhaging deposits to higher-interest money market funds.