federal legislation of 1989 providing government funds to insolvent savings and loan associations, and mandating sweeping changes in the examination and supervision of savings and loans. The act required savings and loans to adopt new capital standards, transferred the regulatory powers of the Federal Home Loan Bank Board to a new agency, the office of thrift supervision, a bureau within the U.S. Treasury Department; and placed the 12 district Federal Home Loan Banks under control of an oversight board, the Federal Housing Finance Board, The act also abolished the defunct Federal Savings and Loan Insurance Corporation (FSLIC).
(25) expanded the enforcement powers of banking regulators, authorizing banking agencies to assess civil money penalties up to $1 million a day and criminal penalties up to $5 million a day, and added bank fraud to crimes covered under the Racketeer Influenced and Corrupt Organizations Act (RICO).
federal law passed in 1989 that restructured the regulatory and deposit insurance apparatus dealing with savings and loan associations and changed the rules under which federally regulated S&Ls operate. See also Federal Housing Finance Board; resolution trust corporation (RTC). FIRREA was intended to address the major problem of failing S&Ls due to mounting nonperforming loans held in portfolio, as well as to make reforms that would prevent the problem from recurring. Often referred to as the “S&L bailout,” the law represents a large expenditure of federal funds to pay off depositors at failed associations. The law also created the resolution trust corporation, which is charged with managing and liquidating the assets of associations seized by the government. The FSLIC was abolished by the law, and its insurance and regulatory responsibilities were brought under the FDIC, which also insures commercial banks.