August 9, 1989 - Financial Institutions Reform, Recovery, and Enforcement Act

Policy Name: Financial Institutions Reform, Recovery, and Enforcement Act of 1989, (H.R. 1278)

Date: Effective August 9, 1989

Following the savings and loans crisis of the 1980s, Congress enacted the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). FIRREA reformed the savings and loans industry by restructuring its regulatory system, establishing stricter capital maintenance requirements, and creating new civil penalties for fraud within federally insured banks. Among its many actions, FIRREA abolished the Federal Home Loan Bank Board and established in its place the Federal Housing Finance Board (FHFB). FIRREA charged the FHFB with overseeing the eleven Federal Home Loan Banks, which represent the largest collective source of home mortgage credit in the United States.

Additionally, FIRREA tasked Freddie Mac and Fannie Mae with additional responsibilities to support mortgages for low- and moderate-income families. FIRREA also authorized state housing finances agencies and non-profit entities to purchase mortgage-related assets.