DEFINITION of 'Garn-St. Germain Depository Institutions Act '

A law enacted by Congress in 1982 to enable banks and other savings institutions to compete more readily in the money market. It got rid of the interest rate ceiling that they once had to abide by, authorized them to make commercial loans and gave the federal agencies the ability to approve bank acquisitions.

BREAKING DOWN 'Garn-St. Germain Depository Institutions Act '

This act was one of the contributing factors of the Savings and Loan Crisis. The S&L crisis was one of the largest government bailouts in U.S. history costing approximately $124 billion. The bailout came to help the 747 savings and loan associations in the U.S. but failed, partly due to the Garn-St. Germain Depository Institutions Act.

RELATED TERMS
  1. Depository Institutions Act of ...

    A law passed by Congress with the intent of making savings and ...
  2. Commercial Bank

    A commercial bank is a type of financial institution that accepts ...
  3. Financial Institutions Regulatory ...

    A United States Federal law enacted in 1978 pertaining to depository ...
  4. Debt Ceiling

    The maximum amount of monies the United States can borrow. The ...
  5. Cost Of Funds

    The interest rate paid by financial institutions for the funds ...
  6. Credit Crisis

    A crisis that occurs when several financial institutions issue ...
Related Articles
  1. Insights

    Top 6 U.S. Government Financial Bailouts

    U.S. bailouts date all the way back to 1792. Learn how the biggest ones affected the economy.
  2. Insights

    Financial Regulations: Glass-Steagall to Dodd-Frank

    Here are some of the most important financial regulations that have been established.
  3. Personal Finance

    How Banks Set Interest Rates on Your Loans

    Many factors go into how banks set interest rates for loans. Use this information to negotiate the best possible rate when you're borrowing.
  4. Insights

    An Introduction to Government Loans

    Government loans further policymakers' efforts to create positive social outcomes by offering timely access to capital for qualified candidates.
  5. Personal Finance

    Should Congress Raise The Debt Ceiling?

    Some members of Congress say the debt ceiling must be raised while others insist it's time Uncle Sam learned how to get by without any more borrowing. We'll look at the issues at stake.
  6. Investing

    What is a Bank?

    A bank is a financial institution licensed to receive deposits or issue new securities to the public.
  7. Personal Finance

    Getting a Loan Without Your Parents

    Use the 5 "W"s to finance your dreams without banking on a second signature.
  8. Investing

    Commercial Real Estate Loans

    Obtaining a commercial real estate loan is quite different from borrowing for residential real estate. Here's what to expect and how to get what you need.
  9. Small Business

    Bailout Acronyms 101

    The subprime meltdown gave rise to a mouthful of financial acronyms. Learn how to sort through this alphabet soup.
RELATED FAQS
  1. What are the similarities and differences between the savings and loan (S&L) crisis ...

    Learn about some of the similarities and differences between the savings and loan crisis and the subprime mortgage crisis ... Read Answer >>
  2. What measures could the U.S. Government take to prevent another crisis similar to ...

    Discover what measures the U.S. government could take to prevent another crisis similar to the S&L crisis. The S&L crisis ... Read Answer >>
  3. What is the difference between a savings & loan company and a bank?

    Find out how a savings and loan company, sometimes also known as a thrift or savings institution, focuses on different types ... Read Answer >>
  4. What major events and policy decisions led to the savings and loan crisis (S&L crisis)?

    Learn about the major events and policy decisions that led to the savings and loan crisis. The catalyst for the crisis was ... Read Answer >>
  5. What are the major categories of financial institutions and what are their primary ...

    Understand the various types of financial institutions that exist in today's economy, and learn the purpose each serves in ... Read Answer >>
Hot Definitions
  1. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  2. Pro-Rata

    Used to describe a proportionate allocation. A method of assigning an amount to a fraction, according to its share of the ...
  3. Private Placement

    The sale of securities to a relatively small number of select investors as a way of raising capital.
  4. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  5. Backward Integration

    A form of vertical integration that involves the purchase of suppliers. Companies will pursue backward integration when it ...
  6. Pari-passu

    A Latin phrase meaning "equal footing" that describes situations where two or more assets, securities, creditors or obligations ...
Trading Center