DEFINITION of 'Mutual Savings Bank - MSB'
A type of thrift institution, originally designed to serve low-income individuals, that historically invested in long-term, fixed-rate assets such as mortgages. Initiated in 1816, the first mutual savings banks (MSBs) were the Philadelphia Saving Society and Boston's Provident Institution for Saving. Most MSBs were located in the Mid-Atlantic and industrial Northeast regions of the United States. By 1910, there were 637 of these institutions.
BREAKING DOWN 'Mutual Savings Bank - MSB'
MSBs were generally very successful until the 1970s. During the 1980s, regulations governing what they could invest in and what rate of interest they could pay to customers combined with rising interest rates to cause massive losses for MSBs. Consequently, many MSBs failed in the 1980s; others merged, became commercial banks or converted to stock form.