Financial Institutions Reform Recovery and Enforcement Act

Financial Institutions Reform, Recovery, and Enforcement Act of 1989

Long title	An Act to reform, recapitalize, and consolidate the Federal deposit insurance system, to enhance the regulatory and enforcement powers of Federal financial institutions regulatory agencies, and for other purposes.
Enacted by	the 101st United States Congress
Citations
Public law	Pub.L. 101–73
Statutes at Large	103 Stat. 183
Legislative history
Introduced in the House as "Financial Institutions Reform, Recovery and Enforcement Act of 1989" H.R. 1278 by Henry B. Gonzalez (D-TX) on March 6, 1989 Committee consideration by House Banking, Finance, and Urban Affairs, House Government Operations, House Judiciary, House Rules, House Ways and Means Passed the House on June 15, 1989 (320–97) Passed the Senate on June 21, 1989 (Voice vote (in lieu of S. 774, passed 91–8)) Reported by the joint conference committee on August 1, 1989; agreed to by the House on August 3 and 5, 1989 (221–199 and 201–175) and by the Senate on August 4, 1989  Signed into law by President George H. W. Bush on August 9, 1989
Major amendments
Dodd–Frank Wall Street Reform and Consumer Protection Act

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), is a United States federal law enacted in the wake of the savings and loan crisis of the 1980s.

It established the Resolution Trust Corporation to close hundreds of insolvent thrifts and provided funds to pay out insurance to their depositors. It transferred thrift regulatory authority from the Federal Home Loan Bank Board to the Office of Thrift Supervision. It dramatically changed the savings and loan industry and its federal regulation, encouraging loan origination.

FIRREA dramatically changed the savings and loan industry and its federal regulation, including deposit insurance. The "Paulson Blueprint" summarized it in the following:

In addition, FIRREA gives both Freddie Mac and Fannie Mae additional responsibility to support mortgages for low- and moderate-income families (12 U.S.C §1441a–2(b). Authorization for State housing finance agencies and nonprofit entities to purchase mortgage-related assets - Investment requirement).

It also created the Bank Insurance Fund (BIF). Both of these funds were to be administered by the Federal Deposit Insurance Corporation. This section of FIRREA was amended by the Federal Deposit Insurance Reform Act of 2005, which consolidated the two funds.

FIRREA allowed bank holding companies to acquire thrifts. It established new regulations for real estate appraisals. In addition, the Act established Appraisal Subcommittee (ASC) within the Examination Council of the Federal Financial Institutions Examination Council. It also established new capital reserve requirements.

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