Financial Institutions Reform, Recovery, and Enforcement Act of 1989

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The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), is a United States federal law enacted in the wake of the savings and loan crisis of the 1980s.

It established the Resolution Trust Corporation to close hundreds of insolvent thrifts and provided funds to pay out insurance to their depositors. It transferred thrift regulatory authority from the Federal Home Loan Bank Board to the Office of Thrift Supervision. It dramatically changed the savings and loan industry and its federal regulation, encouraging loan origination.

FIRREA dramatically changed the savings and loan industry and its federal regulation, including deposit insurance. The "Paulson Blueprint" summarized it in the following:

In addition, FIRREA gives both Freddie Mac and Fannie Mae additional responsibility to support mortgages for low- and moderate-income families (12 U.S.C §1441a–2(b). Authorization for State housing finance agencies and nonprofit entities to purchase mortgage-related assets - Investment requirement).

It also created the Bank Insurance Fund (BIF). Both of these funds were to be administered by the Federal Deposit Insurance Corporation. This section of FIRREA was amended by the Federal Deposit Insurance Reform Act of 2005, which consolidated the two funds.

FIRREA allowed bank holding companies to acquire thrifts. It established new regulations for real estate appraisals. In addition, the Act established Appraisal Subcommittee (ASC) within the Examination Council of the Federal Financial Institutions Examination Council. It also established new capital reserve requirements.

This page was last edited on 6 June 2018, at 00:34.
Reference: https://en.wikipedia.org/wiki/Financial_Institutions_Reform_Recovery_and_Enforcement_Act under CC BY-SA license.

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