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Simple English definitions for legal terms
Federal Savings and Loan Insurance Corporation
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A quick definition of Federal Savings and Loan Insurance Corporation:
Federal Savings and Loan Insurance Corporation: A government organization that was created in 1934 to protect people's money in savings-and-loan associations and savings banks. If a bank failed, the FSLIC would make sure that people got their money back. However, in 1989, the FSLIC ran out of money and had to transfer its responsibilities to another government agency called the FDIC.
A more thorough explanation:
The Federal Savings and Loan Insurance Corporation (FSLIC) was a federal agency established in 1934 to protect deposits in savings-and-loan associations and savings banks. Its main purpose was to provide insurance to depositors in case their financial institution failed.
For example, if you had a savings account in a savings-and-loan association that was insured by the FSLIC and the association went bankrupt, you would still get your money back up to a certain amount. This helped to give people confidence in the banking system and encouraged them to save money.
However, the FSLIC became insolvent in 1989 due to the failure of many savings-and-loan associations. Its assets and liabilities were then transferred to an insurance fund managed by the Federal Deposit Insurance Corporation (FDIC).
The FSLIC is an important part of American financial history because it helped to stabilize the banking system during the Great Depression and beyond. Its legacy lives on through the FDIC, which continues to insure deposits in banks and savings-and-loan associations today.