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“The Big Guys.” That’s what one of my colleague Federal Home Loan Bank presidents used to call the biggest savings and loans. Where are they now?
His attitude was a lingering reflection of the great post-World War II US housing boom, when the most important residential mortgage lenders were the savings and loans. In the Golden Age of the S&Ls, from the 1940s through the 1970s, the American home ownership rate increased dramatically, from about 50% in 1944 to over 64% in 1980. (That is the same level it is now.) Waving the banner of housing and home ownership, the S&Ls were politically potent and their trade association, the US League for Savings, a lobbying force to be reckoned with, until the early 1980s. S&Ls had their own government deposit insurance fund, FSLIC (the Federal Savings and Loan Insurance Corporation).
The list of the 25 biggest S&Ls in America in 1983, just three decades ago, contains many names which were famous in housing finance circles in those days. How many do you think still exist? Make your guess before you read the answer.
These 25 formerly famous names are unheard of now, because of the 25, the number still existing as independent companies is zero. Not one. The US League for Savings no longer exists. Neither does FSLIC.
Of the 25 biggest S&S, 17 failed or were acquired by institutions which later failed. The remaining eight were acquired and are merged portions of much bigger banks.
Here they are, or rather, were, for the instruction of the young in the fragility of institutions, and for the nostalgia of old veterans of the housing finance crises of the 1980s and 2000s:
The Biggest Savings and Loans in the United States, 1983
The Big Guys?
“You were a Big Guy, blink and now you’re gone.”
Alex J. Pollock is a resident fellow at AEI.
Follow AEIdeas on Twitter at @AEIdeas.
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