Federal Savings and Loan

A federal savings and loan (S&L) company is similar to a bank, providing services like deposits, loans, checks, and debit cards, but focusing more on local residential mortgages. Federal S&L companies are usually owned by their customers.

How did federal savings and loan companies come about? Federal S&L firms became more popular around the time of the Great Depression, as they helped to make mortgages more accessible and affordable to middle class folk. While made mostly with mortgages in mind, S&L companies also provide typical banking services, like checking and savings accounts. Unlike commercial banks, federal savings and loans companies can borrow from the Federal Home Loan Bank System.

After the savings and loan crisis in the 1980s and 1990s, which headlined the usual market speculation, fraud, and regulatory issues, S&L companies’ deposits came under the umbrella of the FDIC, making them federally insured. They’re not as popular as they once were, but federal S&L associations are still around.