In 1989, Congress took major steps to establish depository institution accountability by requiring these institutions to hold more capital as they take on riskier assets. Which of the following Congressional acts imposed these capital standards on depository institutions?

Question

Quizplus · Accepted Answer

The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989 imposed capital standards on depository institutions as a measure to establish accountability and regulate their risk-taking behavior. A is incorrect because the Depository Institutions Deregulation and Monetary Control Act (DIDMCA) of 1980 was aimed at deregulating the interest rates that depository institutions could offer on deposit accounts. C is incorrect because the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act of 2008 established licensing requirements for mortgage loan originators. D is incorrect because the Riegle Community Development and Regulatory Improvement Act of 1994 aimed to encourage community development by depository institutions and provided measures for regulatory improvement, but it did not impose capital standards on these institutions.

In 1989, Congress Took Major Steps to Establish Depository Institution