Depository Institutions Deregulation Committee – DIDC

AAA

DEFINITION of 'Depository Institutions Deregulation Committee – DIDC'

A six-member committee established by the Depository Institutions Deregulation and Monetary Control Act of 1980, which had the primary purpose of phasing out interest rate ceilings on deposit accounts by 1986.

The six members of the Committee were the Secretary of the Treasury, the Chairman of the Board of Governors of the Federal Reserve System, the Chairman of the FDIC, the Chairman of the Federal Home Loan Bank Board (FHLBB), and the Chairman of the National Credit Union Administration Board (NCUAB) as voting members, and the Comptroller of the Currency as a non-voting member.

Besides the phase out of interest rate ceilings, the Committee's other tasks included devising new financial products that would allow thrifts to compete with with money funds and to eliminate ceilings on time deposits. But its overall purpose was to deregulate bank interest rates.

INVESTOPEDIA EXPLAINS 'Depository Institutions Deregulation Committee – DIDC'

Since 1933, Regulation Q had limited the interest rates banks could pay on their deposits; these restrictions were extended to Savings & Loans in 1966. As inflation rose sharply in the late 1970s, however, more money was being withdrawn from regulated passbook savings accounts than was deposited, and S&Ls found it increasingly difficult to obtain and secure funds. At the same time, they carried a huge number of long-term loans at low interest rates. As interest rates kept rising, the thrifts found themselves increasingly unprofitable and becoming insolvent. The Monetary Control Act of 1980 and the DIDC were all part of an effort to restore solvency to the thrift industry - an effort that ultimately failed, as S&L managements were ill-equipped to operate in the deregulated environment, that was created.

RELATED TERMS
  1. Volcker Rule

    The Volcker rule separates investment banking, private equity ...
  2. Regulation L

    One of the regulations set forth by the Federal Reserve. Regulation ...
  3. Depository Institutions Act of ...

    A law passed by Congress with the intent of making savings and ...
  4. Deregulation

    The reduction or elimination of government power in a particular ...
  5. Regulation Q

    A Federal Reserve Board regulation that prohibited banks from ...
  6. Thrift Bank

    A financial institution focusing on taking deposits and originating ...
Related Articles
  1. Options & Futures

    Get To Know These Crucial US Options Market Regulations

    How are options regulated in the U.S and which organizations are involved in options market regulations?
  2. Economics

    Are Greece’s Worries Almost Over?

    Last week ended with the news that Greece and the European Union (EU) finance ministers struck a deal to temporarily extend the Greek bailout program.
  3. Economics

    What's Expansionary Policy?

    Expansionary policy is a macroeconomics concept that focuses on expanding the economy to counteract cyclical downturns. Expansionary policy can be implemented in one of two ways, or a combination ...
  4. Economics

    When Will The Fed Raise Interest Rates?

    We discuss how the actions of U.S. central bank leaders (i.e. “The Fed”) will affect interest rates in the near future.
  5. Economics

    Why Is Ukraine At War? A Russian Rivalry With West

    Huge power games which are being played behind the Ukrainian conflict are rooted in a previous revolution, a past Cold War, and an old Russia-West rivalry.
  6. Economics

    Does A Junk Rating Reflect Russia's Fundamentals?

    Moody’s, like other credit rating agencies, has downgraded Russia’s sovereign debt rating to non-investment grade, but does this reflect Russia's economy?
  7. Economics

    The Impact Of Ending The US Embargo On Cuba

    Many argue that ending the US embargo on Cuba will not only make US consumers happy, but also help the US economy and bring more freedoms to Cuba.
  8. Economics

    This Is A Small Country With Huge Potential to Grow

    Trinidad and Tobago's increased revenue and economic success have been primarily generated by its energy sector, but it still might be best to diversify.
  9. Economics

    Popular Places Where U.S. Citizens Need A Visa

    A U.S. passport will get you into many countries, but not everywhere. Here's how to visit five of the most popular destinations that require visas.
  10. Economics

    Are You the Victim of Unfair Labor Practices?

    If you are a union member, a union leader, or a manager at a company with an established union, you should understand unfair labor practices.

You May Also Like

Hot Definitions
  1. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  2. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  3. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  4. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  5. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center