Question

How did high interest rates affect savings and loans (S&Ls) in the 1980s?

Answer 1

was the failure of about 747 out of the 3,234 savings and loan associations in the United States. A savings and loan or "thrift" is a financial institution that accepts savings deposits and makes mortgage, car and other personal loans to individual members—a cooperative venture known in the United Kingdom as a Building Society. "As of December 31, 1995, RTC estimated that the total cost for resolving the 747 failed institutions was $87.9 billion." The remainder of the bailout was paid for by charges on saving and loan accounts[1]—which contributed to the large budget deficits of the early 1990s.

- Causes
2.1 Tax Reform Act of 1986
2.2 Deregulation
2.3 Imprudent real estate lending
2.4 Brokered deposits
2.5 End of inflation
2.6 Major causes according to United States League of Savings Institutions
2.7 Major causes and lessons not learned per William K. Black
- Failures
3.1 Home State Savings Bank of Cincinnati
3.2 Midwest Federal Savings & Loan of Minneapolis, Minnesota
3.3 Lincoln Savings and Loan
3.4 Silverado Savings and Loan

http://en.wikipedia.org/wiki/Savings_and_loan_crisis

Answer 2

I have the same question. Isn't it multiple choice?
A: S and Ls made large amounts of money because they earned high interest rates on loans they made throughout the 1970s.
B: S and Ls lost money because the earnings they made were not enough to pay off the massive loans they had taken out from the Federal Reserve.
C: S and Ls lost money because they had to pay high interest on current deposits, but received low returns from loans they had to made in the 1970s.
D: (<---- lol that face) S and Ls made money because high interest rates attracted more depositors, and S and Ls used their deposits to make more loans.

If you get an answer let me know?
I think it's kind of C, but otherwise I don't know the answer.