savings and loan Associations

savings and loan Associations(S&Ls)were originally designed as mutual associations, (i.e., owned by depositors) to convert funds from savings accounts into mortgage loans. the purpose was to ensure a market for financing housing loans. Over the past 20 years a very active market for mortgages has developed, diminishing the need for regulations forcing S&Ls to concentrate on housing loans. Largely for this reason, during the 1980s government regulation of the types of assets savings and loans can hold was weakened, and today the distinction between S&Ls and commercial banks is minimal. S&Ls continue to hold a less diversified set of assets than commercial banks do.