A thrift bank, also just referred to as a thrift, is a particular kind of financial organization that focuses on providing people with savings accounts and originating home mortgages. Because they often give greater rates on savings accounts and offer fewer lending services to companies than larger commercial banks like Wells Fargo or Bank of America, thrift banks set themselves apart from those institutions.
While traditional savings accounts and home loan origination are a thrift’s main services, these businesses also provide bank accounts, personal and auto loans, and credit cards to customers. However, they focus their attention mostly on single-family house finance. Thrifts can be set either as corporate companies with shareholders or as mutually owned entities with depositors and borrowers as owners.
Many thrift institutions and S&Ls failed during the Savings and Loan Crisis, which lasted between 1986 and 1995. Even though researchers have offered a variety of causes for the sharp drop in the sector, ineffective lending procedures have often been blamed for the failure.
Many structural changes to thrift banks have been undertaken in the years following the Crisis, which have tended to obfuscate some of the differences between them and conventional banks. On the S&L and thrift industry, the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) had a considerable effect.
