Chapter Seventeen

1. Chapter Seventeen THRIFTS: SAVINGS AND LOANS AND CREDIT UNIONS

2. Thrift Institutions • Mutual Savings Banks • Depositors areowners of the firm • No stock in the bank, not sold or issued • Savings and Loan Association • Created by Congress • Insured deposits and scandals：1980年代 • S&L bailout • Credit Unions • Ownership • Membership

3. Savings and Loan Industry Today • Number of Institutions • Types of Loans • S&L Size • S&L Assets • S&L Liabilities and Net Worth • Capital

4. Savings and Loan Industry Today • (1)S&L到70年代中期為止都很健全。因為享受到低成本資金來源，而放款又很安全(因為不動產很景氣) • (2)70年代末期，i，由於Reg Q, 使其存款流失，而且早期fixed rate mortgage使S&L獲利下跌。 • (3)80年代初期 • 1.deregulation，允許S&L做其他的Loan (如commercial, consumer), 或買junk bond，但S&L本身沒有這方面的expertise，所以出現許多呆帳。 • 2.regulators沒有足夠的resource和expertise來監督S&L(因為國會不通過) • 3.存款保險道德危機 • 4.不動產市場不景氣

5. Savings and Loan Industry Today • (4)80年代中期，晚期的 regulatory forbearance，造成“zombie S&L” why? • 1.regulator沒有足夠的錢接管S&L • 2.接受賄賂(S&L是政客的金主) • 3.面子問題(regulator是agent，納稅人才是principal) • 有很多S&L早該倒，但regulator允許他們將goodwill算作equity • (5)造成很多S&L的moral hazard, risk-taking behavior，如：沙漠中蓋購物中心，買junk bond，同時壞的S&L會打敗好的S&L。

6. Savings and Loan Industry Today • (6)90年代初期，情況開始好轉 • 1.RTC接管倒閉的S&L，處理不動產，花掉150billion • 2.新的S&L監理單位 • 3.提高存款保險費率 • 4.立法限制S&L所能持有的資產mortgage

7. Decline in Number of Savings and Loan Associations • Fail • RTC takeover • merged with others • Convert into商業銀行or信合社

8. Total Assets of Savings and Loan Associations

9. Savings and Loan Assets

10. Savings and Loan Size Average size per S&L million ∵(E/A)要提升∴A

11. S&L Balance Sheet Savings and Loan Associations Assets Liabilities Securities 252,042 Loans secured by 632,256 real estate Commercial loans 17,768 Loans to individuals 48,851 Other loans and leases 2,881 (Less reserve for loan -6,984 losses) Other real estate owned 1,765 Goodwill 12,688 All other assets 83,530 Total assets 1,044,797 Deposits 702,607 Other borrowed funds 230,674 Notes and debentures 2,930 All other liabilities 15,197 Total liabilities 951,406 Equity 93,391 Total of liabilities and equity 1,044,797

12. The Future of the S&L Industry

13. Savings and Loan’s Return on Equity S&L industry現在已恢復正常 但未來是否會被消滅(如：不動產證券化是S&L最大競爭者)? Probably not!

14. Credit Unions • Mutual Ownership • Owned by depositors • Common Bond Membership • Defined field of membership • Nonprofit, Tax-Exempt Status • Lower service fee • Regulation and Insurance • Central Credit Unions • Help with members’ credit needs • Invest excess funds • Hold clearing balances • Provide educational services • Credit Union Size：小 • Trade Associations ：為了economy of scale

15. Credit Union Fees vs. Bank Fees

16. Number of Credit Unions, 1933-1998

17. Types of Accounts • Regular Share Accounts • Savings accounts • Receive no interest • Do receive dividends but not guaranteed • Share Certificates • Compatible to CDs • Share Draft Accounts：像checking deposit • Pay interest • Write drafts against account

18. Types of Accounts • Advantages • Employer Support • Tax Advantage • Strong Trade Associations • Disadvantages • Common Bond Requirement