Thrift Bank

Thrift banks, a.k.a. savings and loans associations (S&Ls), are small banks that mainly take in deposits and dole out mortgages. Some are structured as corporate entities with shareholders to please, while others are owned by their customers, both depositors and borrowers alike.

Thrift banks can compete with big boy internationals like Wells Fargo, because the interest rates their accounts offer is much higher. While thrift banks also give loans to businesses, they’re required by law to give out more to consumers; 65% of their loan money must be given to consumers.

S&L banks are somewhat shaped by the U.S.’s history with mortgages, such as when the U.S. created the VA and VA loans, FHA and FHA loans...yada yada. The more people who started defaulting on their mortgages, the more the U.S. government stepped in and made rules and organizations to help.

That in turn made homeownership skyrocket...well, until the savings and loan crisis in the '80s. Thrift bank laws changed during that time, as well as in more recent years with the passage of the Dodd-Frank Act, which made it harder for them to compete with the big banks. But hey, it’s all in the name.