How Savings and Loan Associations Work -- And How to Find One
Key Points
Savings and Loans (S&Ls) have a long history, having been around since the 1800s.
The S&L crisis of the 1980s led many to close, but others continue to provide mortgages.
Some S&Ls provide lower mortgage rates than can be found at other financial institutions.
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Savings and loan associations (S&Ls) are a product of the 19th century. Created in the 1800s, S&Ls were a place where everyday families could pool their money and finance homes of their own. At the time, mortgages weren't typically available to working families, so those families found a way to make homeownership possible.
Thanks to the Savings and Loan crisis of the 1980s, many S&Ls shuttered their doors. Before then, though, they were a powerful tool for families who dreamed of homeownership. At one time, S&Ls originated two-thirds of all mortgages written in the U.S.
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There may be far fewer S&Ls in the U.S. than there once were, but these financial institutions are still helping regular households by offering lower-rate mortgages and home equity loans. In addition, many S&Ls pay competitive rates on savings.
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What you can expect from an S&L
The primary focus of S&Ls is to provide mortgages and give people a safe place to deposit their money. Like banks, S&Ls are insured by the FDIC, protecting accounts for up to $250,000 per person. And like credit unions, S&Ls are owned by depositors and borrowers (called "shareholders").
While an S&L may not offer as wide a range of financial products as a larger bank or credit union, they have stayed true to their primary mission of ensuring mortgages are available to those who might not otherwise have access to funds.
How to find an S&L
In 1980, there were nearly 4,000 S&Ls in the U.S. Due to the S&L crisis of the 1980s and strict government intervention, that number is down to 546. However, those 546 S&Ls operate under a much different set of rules than earlier S&Ls, making them far stronger and more secure.
Finding the S&L nearest to you is as easy as logging onto the Office of the Comptroller of Currency's website and typing the words Savings and Loan (along with the name of your city and state) in the search bar. Within moments, a list of S&Ls near you will appear. If there are no nearby S&Ls, go back to the search bar and type in Savings and Loan and the name of your state. Scroll down that list to find the town closest to yours.
If even the term "Savings and Loan" seems old-fashioned, that's probably because S&Ls have been around for so long. Despite a sometimes troubled history, S&Ls have enabled millions of households to purchase a home of their own.
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