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Answer the following questions located at the end of Chapter 14 in your text. The questions focus on the recent crisis in the savings institution industry, the basics of these institutions and finance companies.

  • Questions 2, 3, 4, 6, 8, 14, 16, 18, 20, 22.

Write complete answers with full sentences and illustrations in a Word document.

2. What were the reasons for the crisis of the savings institu- tions industry in the late 1970s and early 1980s? (LG 14-1)

3. What two major pieces of legislation were adopted in the early 1980s to ameliorate the thrift crisis? Explain. (LG 14-1)

4. What shortcomings in the Depository Institutions Deregu- lation and Monetary Control Act of 1980 (DIDMCA) and the Garn-St. Germain Depository Institutions Act of 1982 (GSGDIA) contributed to the failure of the SI industry? (LG 14-1)

6. What are the main assets and liabilities held by savings institutions? (LG 14-2)

8. What has happened to the value of savings institutions’ charters in the period of time since October 1979? How did this shift contribute to the crisis in the savings institution industry? (LG 14-3)

14. What are the main assets and liabilities held by credit unions? (LG 14-6)

16. Why did commercial banks pursue legal action against the credit union industry in the late 1990s? What was the result of this legal action? (LG 14-5)

18. What are the three types of finance companies and how do they differ from commercial banks? (LG 14-7)

20. What are the major assets and liabilities held by finance companies? (LG 14-8)

22. Why was the reported rate on motor vehicle loans histori- cally higher for a finance company than a commercial bank? Why did this change in 1997?

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