Financial Institutions Reform Recovery and Enforcement Act
The Financial Institutions Reform Recovery and Enforcement Act (FIRREA) is a United States federal law enacted in 1989 in the wake of the savings and loan crisis of the 1980s. It established the Resolution Trust Corporation (RTC) to close hundreds of insolvent thrifts and provided funds pay out insurance to their depositors. It moved thrift regulatory authority from the Federal Home Loan Bank Board to the Office of Thrift Supervision (OTS) to regulate thrifts.
Deposit insurance
FIRREA created two new deposit insurance funds. It abolished the Federal Savings and Loan Insurance Corporation (FSLIC); the fund originially administered by FSLIC became the Savings Association Insurance Fund (SAIF). 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.
Other regulations
FIRREA allowed bank holding companies to acquire thrifts. It established new regulations for real estate appraisals. It also established new capital reserve requirements.