A building and loan association, sometimes referred to as a savings and loan association or loan company, is a type of financial institution that provides savings and loan services to individual customers. Building and loan associations were historically created to help low-income citizens save up for home purchase and financing loans. These organizations are regulated by the government, providing customer protection and a safe place to store their money.
How Does a Building and Loan Association Work?
Building and loan associations provide customers with a variety of savings and loan services. Customers can open savings accounts, deposit money into these accounts, and receive interest on the money they save with the bank. Customers can also take out loans, either to purchase a home or for other investments. Loan funds are raised through deposits from individual customers and from investments in government bonds.
Modern Examples of Building and Loan Associations
Today, building and loan associations are still prominent in the United States. Some well-known ones include Chase Bank, Wells Fargo, Navy Federal Credit Union, and USAA Federal Savings Bank. Many of these banking institutions also offer a variety of other services, such as investing and insurance, in addition to offering savings and loan services.
Conclusion
Building and loan associations are an important part of the financial system, providing customers with a safe and efficient way to save money and receive loans. These associations are highly regulated by the government, providing customer protection and helping them achieve financial security.