Depository Institutions Deregulation and Monetary Control Act: Difference between revisions

Add links
From Wikipedia, the free encyclopedia
Browse history interactively
← Previous editNext edit →
Content deleted Content added
VisualWikitext
OAbot (talk | contribs)
Bots
419,746 edits
m Open access bot: doi added to citation with #oabot.
Rescuing 1 sources and tagging 0 as dead.) #IABot (v2.0.9.3) (Whoop whoop pull up - 13024
Line 64: Line 64:
* It raised the [[deposit insurance]] of US banks and credit unions from $40,000 to $100,000.
* It raised the [[deposit insurance]] of US banks and credit unions from $40,000 to $100,000.
* It allowed [[credit union]]s and [[savings and loan]]s to offer [[checkable deposit]]s.
* It allowed [[credit union]]s and [[savings and loan]]s to offer [[checkable deposit]]s.
* It allowed institutions to charge any loan interest rates they chose.<ref name="Minton">Michelle Minton, [http://cei.org/sites/default/files/Michelle%20Minton%20-%20CRA%20-%20FINAL_WEB.pdf The Community Reinvestment Act's Harmful Legacy, How It Hampers Access to Credit], [[Competitive Enterprise Institute]], No. 132, March 20, 2008.</ref><ref name="Atlas Dreier">John Atlas and Peter Dreier, [http://www.prospect.org/cs/articles?article=the_conservative_origins_of_the_subprime_mortgage_crisis The Conservative Origins of the Sub-Prime Mortgage Crisis], [[The American Prospect]], December 18, 2007.</ref>
* It allowed institutions to charge any loan interest rates they chose.<ref name="Minton">Michelle Minton, [http://cei.org/sites/default/files/Michelle%20Minton%20-%20CRA%20-%20FINAL_WEB.pdf The Community Reinvestment Act's Harmful Legacy, How It Hampers Access to Credit], [[Competitive Enterprise Institute]], No. 132, March 20, 2008.</ref><ref name="Atlas Dreier">John Atlas and Peter Dreier, [http://www.prospect.org/cs/articles?article=the_conservative_origins_of_the_subprime_mortgage_crisis The Conservative Origins of the Sub-Prime Mortgage Crisis] {{Webarchive|url=https://web.archive.org/web/20080411171345/http://www.prospect.org/cs/articles?article=the_conservative_origins_of_the_subprime_mortgage_crisis |date=2008-04-11 }}, [[The American Prospect]], December 18, 2007.</ref>


The act was in part a response to economic volatility and financial innovations of the 1970s that increasingly pressed the highly regulated savings and loan industry and arguably had [[unintended consequences]] that helped lead to the collapse and subsequent bailout of that financial sector. While S&Ls were freed to pay depositors higher interest rates, the institutions continued to carry large portfolios of loans paying them much lower rates of return; by 1981, 85 percent of the thrifts were losing money and the congressional response was the [[Garn–St. Germain Depository Institutions Act|Garn–St Germain Depository Institutions Act of 1982]].<ref>{{Cite book|last=Collins|first=Robert M.|title=Transforming America: Politics and Culture in the Reagan Years|publisher=Columbia University|year=2007|isbn=978-0-231-51130-8|location=New York|pages=83–84}}</ref>
The act was in part a response to economic volatility and financial innovations of the 1970s that increasingly pressed the highly regulated savings and loan industry and arguably had [[unintended consequences]] that helped lead to the collapse and subsequent bailout of that financial sector. While S&Ls were freed to pay depositors higher interest rates, the institutions continued to carry large portfolios of loans paying them much lower rates of return; by 1981, 85 percent of the thrifts were losing money and the congressional response was the [[Garn–St. Germain Depository Institutions Act|Garn–St Germain Depository Institutions Act of 1982]].<ref>{{Cite book|last=Collins|first=Robert M.|title=Transforming America: Politics and Culture in the Reagan Years|publisher=Columbia University|year=2007|isbn=978-0-231-51130-8|location=New York|pages=83–84}}</ref>

Revision as of 00:26, 1 April 2023

Depository Institutions Deregulation and Monetary Control Act
Great Seal of the United States
Other short titles
  • Depository Institutions Deregulation and Monetary Control Act of 1980
  • Consumer Checking Account Equity Act of 1980
  • Depository Institutions Deregulation Act of 1980
  • Financial Regulation Simplification Act of 1980
  • Monetary Control Act of 1980
  • Truth in Lending Simplification and Reform Act
Long titleAn Act to facilitate the implementation of monetary policy, to provide for the gradual elimination of all limitations on the rates of interest which are payable on deposits and accounts, and to authorize interest-bearing transaction accounts, and for other purposes.
NicknamesConsumer Checking Account Equity Act of 1979
Enacted bythe 96th United States Congress
EffectiveMarch 31, 1980
Citations
Public law96-221
Statutes at Large94 Stat. 132
Codification
Titles amended12 U.S.C.: Banks and Banking
U.S.C. sections amended12 U.S.C. ch. 3 § 226
Legislative history

The Depository Institutions Deregulation and Monetary Control Act of 1980 (H.R. 4986, Pub. L.Tooltip Public Law (United States) 96–221) (often abbreviated DIDMCA or MCA) is a United States federal financial statute passed in 1980 and signed by President Jimmy Carter on March 31.[1] It gave the Federal Reserve greater control over non-member banks.

The act was in part a response to economic volatility and financial innovations of the 1970s that increasingly pressed the highly regulated savings and loan industry and arguably had unintended consequences that helped lead to the collapse and subsequent bailout of that financial sector. While S&Ls were freed to pay depositors higher interest rates, the institutions continued to carry large portfolios of loans paying them much lower rates of return; by 1981, 85 percent of the thrifts were losing money and the congressional response was the Garn–St Germain Depository Institutions Act of 1982.[5]

The bill's passage is considered an important shift in the Democratic Party's positioning on economic regulation, as the party had historically defended New Deal era financial regulations, but had now come to favor financial deregulation. According to a 2022 study, this shift happened as a consequence of the congressional reforms of the 1970s, which undermined parochial and Southern populist interests within the Democratic Party. These parochial and populist interests favored a decentralized banking system. The party subsequently pursued deregulatory reforms that it perceived as beneficial to savers and consumers.[6]

References

  1. ^ "Depository Institutions Deregulation and Monetary Control Act of 1980 Remarks on Signing H.R. 4986 into Law. | the American Presidency Project".
  2. ^ a b Gilbert, Alton. "Requiem for Regulation Q: What It Did and Why It Passed Away", Federal Reserve Bank of St. Louis: pp. 31-33. [1]
  3. ^ Michelle Minton, The Community Reinvestment Act's Harmful Legacy, How It Hampers Access to Credit, Competitive Enterprise Institute, No. 132, March 20, 2008.
  4. ^ John Atlas and Peter Dreier, The Conservative Origins of the Sub-Prime Mortgage Crisis Archived 2008-04-11 at the Wayback Machine, The American Prospect, December 18, 2007.
  5. ^ Collins, Robert M. (2007). Transforming America: Politics and Culture in the Reagan Years. New York: Columbia University. pp. 83–84. ISBN 978-0-231-51130-8.
  6. ^ Barton, Richard (2022). "Upending the New Deal Regulatory Regime: Democratic Party Position Change on Financial Regulation". Perspectives on Politics: 1–18. doi:10.1017/S153759272200113X. ISSN 1537-5927. S2CID 252061496.

Further reading

External links

Stub icon

This economic policy related article is a stub. You can help Wikipedia by expanding it.

Stub icon

This United States federal legislation article is a stub. You can help Wikipedia by expanding it.

Retrieved from "https://en.wikipedia.org/w/index.php?title=Depository_Institutions_Deregulation_and_Monetary_Control_Act&oldid=1147598843"