1967: Texas Approves Major Liberalization of S&L Powers

The state of Texas approves a major liberalization of savings and loan associations’ (S&Ls) powers, allowing property development loans of up to 50 percent of their net worth. This will be compounded in 1982, when, in response to massive defections of state-chartered S&Ls to the federal system, California, then Texas and Florida, allow S&Ls to invest 100 percent of deposits in any kind of venture. In addition, while S&Ls operating under state charters are allowed to obtain federal insurance under the Federal Savings and Loan Insurance Corporation (FSLIC), states with the softest standards can still qualify on the same basis. [Texas Savings and Loan Department, 7/14/1967; Texas Savings and Loan Department, 8/15/1967; Economic Populist, 8/4/2008] More than one-half of all S&L losses nationwide, including 14 of the 20 largest losses, will be in Texas. [Federal Deposit Insurance Corporation, 12/20/2002]