Conning the IADC Newsletters

Abstract

International Association of Defense Counsel Committee members prepare newsletters on a monthly basis that contain a wide range of practical and helpful material. This section of the Defense Counsel Journal is dedicated to highlighting interesting topics covered in recent newsletters so that other readers can benefit from committee specific articles. SIMILARITIES BETWEEN THE SAVINGS & LOAN CRISIS AND TODAY'S CURRENT FINANCIAL CRISIS: WHAT THE PAST CAN TELL US ABOUT THE FUTURE This article originally appeared in the September 2009 Fidelity and Surety Committee Newsletter. I. Introduction It goes without saying that the financial industry, along with numerous other sectors of the United States and global economies, are currently in peril. According to statistics posted on the Federal Deposit Insurance Corporation's (FDIC's) website, in 2008, twenty-five financial institutions failed in the United States; and as of July 7, 2009, 52 financial institutions already have failed in 2009. (1) By comparison, in 2007, only three banks failed, and in 2005 and 2006, no banks failed. (2) Along with this significant increase in bank failures, it is no surprise that financial institutions have been the main focus of litigation by both private parties and the government. Despite what some could refer to as sensationalism in the media regarding the unprecedented nature of the current crisis, this country weathered a similar collapse of its financial sector during the Savings & Loan (SL (2) the Federal Savings and Loan Insurance Corporation (FSLIC), which insured deposits in SL and (3) the Federal Deposit Insurance Corporation (FDIC), which regulated federally-chartered commercial banks and provided a federal deposit insurance program. …