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Context of '1967: Texas Approves Major Liberalization of S&L Powers'

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The Federal Home Loan Bank Act is introduced in the House of Representatives on May 25, 1932. It passes Congress on July 16 and is signed into law by President Hebert Hoover six days later, on July 22. The act is intended to lower the cost of home ownership. It establishes the Federal Home Loan Bank Board (FHLBB) to charter and supervise federal savings and loan associations (S&Ls). It also creates Federal Home Loan Banks, which lend to building and loan associations, cooperative banks, homestead associations, insurance companies, savings banks, community development financial institutions, and insured depository institutions in order to finance home mortgages. [The American Presidency Project, 7/22/1932]

Entity Tags: US House of Representatives, Federal Home Loan Bank Board, US Congress, Herbert Hoover

Timeline Tags: Global Economic Crises

The Federal Savings and Loan Insurance Corporation (FSLIC) is established. It is administered by the Federal Home Loan Bank Board (FHLBB), which was formed by the Federal Home Loan Bank Act of 1932. The FSLIC is created as part of the National Housing Act of 1934, New Deal legislation passed amid the ongoing Great Depression in order to make housing and home mortgages more affordable. The act, which also establishes the Federal Housing Administration (FHA), is signed into law by President Franklin D. Roosevelt. Upon its creation, the FSLIC is assigned a capital stock of $100 million. All federal savings and loan associations (S&Ls) will be required to apply for insurance through the FSLIC; other building and loan associations whose capital is not impaired are also allowed to apply. The FSLIC is given certain regulatory powers over insured institutions, requiring each institution to accumulate reserves over several years, and assesses an annual insurance premium, calculated at 0.25 percent of the total amount of all accounts of insured shareholders or members, plus any creditor obligations. The FSLIC will routinely suspend insurance premiums whenever its reserve fund is greater or equal to five percent of all insured accounts and creditor obligations of all insured institutions. [Courier News, 7/28/1934]

Entity Tags: Franklin Delano Roosevelt, Federal Housing Administration, Federal Savings and Loan Insurance Corporation, Federal Home Loan Bank Board

Timeline Tags: Global Economic Crises

The state of Texas approves a major liberalization of savings and loan associations’ (S&Ls) powers, allowing property development loans of up to 50 percent of their net worth. This will be compounded in 1982, when, in response to massive defections of state-chartered S&Ls to the federal system, California, then Texas and Florida, allow S&Ls to invest 100 percent of deposits in any kind of venture. In addition, while S&Ls operating under state charters are allowed to obtain federal insurance under the Federal Savings and Loan Insurance Corporation (FSLIC), states with the softest standards can still qualify on the same basis. [Texas Savings and Loan Department, 7/14/1967; Texas Savings and Loan Department, 8/15/1967; Economic Populist, 8/4/2008] More than one-half of all S&L losses nationwide, including 14 of the 20 largest losses, will be in Texas. [Federal Deposit Insurance Corporation, 12/20/2002]

Entity Tags: Federal Savings and Loan Insurance Corporation

Timeline Tags: Global Economic Crises

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