Page 21 - Book4E

CHAPTER 4
Mutual Savings Banks (MSBs)
Unlike Savings and Loan Associations, Mutual Savings Banks were established for the specific purpose of providing a safe place for working people (whose investments were too small to be held by commercial banks) to save their money for interest-bearing investments, rather than for purchasing a home. These banks were also intended to encourage working people
to develop good money management by saving a portion of their income. Mutual Savings Banks invested the combined amount of all the deposits and generally were restricted by charter to investing in government bonds.
All Mutual Savings Banks were initially state-chartered. In 1982, however, the Garn–St. Germain Depository Institutions Act made many of the differences between SLAs and MSBs less distinct by allowing MSBs to switch to federal charters and allowing SLAs to become savings banks as well as lending institutions. These new powers allowed for a large number of institutions to become full- service, consumer financial centers and to make a limited number of business loans as well. The savings and loan crisis of the 1980s and 1990s led the federal government to restructure the industry, further erasing the traditional differences between SLAs and MSBs.
In addition to checking accounts and savings options that include insured money market accounts, MSBs now offer a range of con- sumer loans, including automobile loans, home equity and home
The mint makes it first; it is up to you to make it last.
—Evan Esar
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