The term 'savings and loan association' is popularly used in the USA while in the UK it is more often referred to as the building societies. The savings and loan associations can be formed in two ways - either as capital stock institution or as a mutual institution. The working principle of the mutual organization is similar to that of the mutual savings banks.
In the early days of 20th century, the savings and loan association became more visible than before. It became popular in helping people getting mortgages and home ownerships. The association also came forward in assisting the association members with the basic investing and saving outlets through term certificates of deposits and also through passbook savings accounts.
The first savings and loan association in the USA was established in 1831. The Federal Home Loan Bank System was formed in the year of 1932 in order to supervise the activities of savings and loan associations of the country. The deposits kept in these associations were also being insured by the Federal Savings and Loan Insurance Corporation (FSLIC) since then. The field of savings and loan association market started to expand rapidly after World War II.
The U.S. federal government took some deregulatory measures in the 1980s and since then the savings and loan associations are going through numerous changes. This has made the associations to offer much more services to the customers than before. This is also the reason that the savings and loan institutions have entered into the domain of trust services, commercial lending and non-mortgage consumer lending.
