TAKING STOCK IN THRIFTS
The thrift industry has changed dramatically since the early 1980s. High and volatile interest rates had resulted in catastrophic losses for an industry which for many years had borrowed short and lent long. The need for new legislation to permit the industry to escape from its economic dilemma was obvious. The Depository Institutions Deregulation Act of 1980 and the Garn-St. Germain Act of 1982 together became the cornerstones of a new thrift industry, which is now permitted to lend on a much shorter term and/or adjustable rate basis and borrow on a much longer-term basis than was previously permitted.
This new permissiveness, combined with declining interest rates, has allowed the industry to move quickly into a restructuring phase.
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