Legal Definitions - savings and loan

Definition: Savings and loan (S&L) associations, also known as thrifts, are financial institutions that specialize in providing residential mortgage loans and accepting savings deposits. They may also offer other services such as loans and checks.

S&L associations can be organized in two ways: cooperatively or corporately. In a mutual ownership model, depositors and borrowers own the S&L. In a stock ownership model, shareholders own the S&L under a charter.

S&L associations can be chartered at the state or federal level. The Office of Thrift Supervision monitors their activities to ensure they operate safely and comply with financial regulations.

Example: A person who wants to buy a house can go to an S&L association to get a mortgage loan. They can also deposit their savings in the same institution. The S&L association uses the deposits to fund the mortgage loans.

Explanation: This example illustrates how S&L associations specialize in providing residential mortgage loans and accepting savings deposits. The S&L association uses the deposits to fund the mortgage loans, which is their primary business.