Chapter Seventeen

Copyright © 2000 Addison Wesley Longman Slide #17-1

Chapter Seventeen

THRIFTS: SAVINGS AND LOANS AND CREDIT UNIONS


Thrift InstitutionsMutual Savings Banks

Depositors are owners of the firm No stock in the bank, not sold or issued

Savings and Loan Association Created by CongressInsured deposits and scandals ： 1980 年代S&L bailout

Credit UnionsOwnership Membership


Savings and Loan Industry Today

Number of Institutions

Types of Loans

S&L Size

S&L Assets

S&L Liabilities and Net Worth

Capital


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


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 。


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


Decline in Number of Savings and Loan Associations

(1) Fail(2) RTC takeover(3) merged with others(4) Convert into 商業銀行 or 信合社


Total Assets of Savings and Loan Associations


Savings and Loan Assets


Savings and Loan SizeAverage size per S&L

million

∵(E/A) 要提升∴ A


S&L Balance SheetSavings and Loan AssociationsAssets Liabilities

Securities 252,042Loans secured by 632,256 real estateCommercial loans 17,768Loans to individuals 48,851Other loans and leases 2,881(Less reserve for loan -6,984 losses)Other real estate owned 1,765Goodwill 12,688All other assets 83,530 Total assets 1,044,797

Deposits 702,607Other borrowed funds 230,674Notes and debentures 2,930All other liabilities 15,197 Total liabilities 951,406

Equity 93,391 Total of liabilities and equity 1,044,797


The Future of the S&L Industry


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!


Credit UnionsMutual Ownership

Owned by depositorsCommon Bond Membership

Defined field of membershipNonprofit, Tax-Exempt Status

Lower service feeRegulation and InsuranceCentral Credit Unions

Help with members’ credit needsInvest excess fundsHold clearing balancesProvide educational services

Credit Union Size ：小Trade Associations ：為了 economy of scale


Credit Union Fees vs. Bank Fees


Number of Credit Unions, 1933-1998


Types of AccountsRegular Share Accounts

Savings accountsReceive no interest Do receive dividends but not guaranteed

Share CertificatesCompatible to CDs

Share Draft Accounts ：像 checking deposit

Pay interestWrite drafts against account


Types of Accounts

Advantages

Employer Support

Tax Advantage

Strong Trade Associations

Disadvantages

Common Bond Requirement

Chapter Seventeen

Documents

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