Depository Institutions Deregulation and Monetary Control Act of 1980

Depository Institutions Deregulation and Monetary Control Act of 1980

Federal legislation that accomplished phenomenal deregulation of federally chartered financial institutions,leading to state deregulation so that state-chartered financial institutions could compete with their federal cousins.Regulation Q phased out the former limits on interest that could be paid on deposits.Many analysts say that the resulting unbridled competition for depositors'money,leading to a bidding war to gain depositors,drove financial institutions to make ever riskier loans in order to obtain the high interest rates necessary to service the deposits.According to such analysts, this legislation was one of the primary factors in the savings and loan crash, the banking crisis, and the FDIC bailout of the mid to late 1980s.