The federal law that prohibited savings and loans from buying junk bonds and required savings and loans to focus the majority of their lending on the housing industry was the:

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The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989 was enacted in response to the savings and loan crisis of the 1980s. It prohibited savings and loan associations from engaging in certain risky activities, such as purchasing junk bonds, and refocused their lending practices towards the housing industry.

The Federal Law That Prohibited Savings and Loans from Buying