Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-09-14
BU|[D|NG-[OAN
800
!. INSURANCE QUIZ
Questions and Answers Ex'
plain Scope of Federal
Backing.

Editors note: The toll0tD1lg set
OF questions and ANSWERS is de-
signed to dcQu1int some 5000 900
small Investors in associations OF
the building and loan type with the
through the Federal Savings and
Loan Insurance Corporation, as
ueH as to make clear the difference
.between this form of insurance and
the insurance OF mortgages under
the Federal Housing Adn,iniStra-
tom
Insurance of building and loan
shares is provided through the Federal
Savings g. Loan Insurance Corp. a
500, 100000 institution wholly owned
by the United States Government,
which was established in 1884 to pro-
tect the safety of accounts held in the
insured institutions against loss up to
$4,000 for each investor. Insurance is
compulsory for all Federal savings
and loan associations, but optional for
State chartered associations. a large
number of which have recently be-
come insured in the interest of their
investors.
@. What types of institutions are
eligible for insurance?
A. A Federal savings and loan asso-
citation, a State-chartered, building
and loan, savings and loan, or home
stead association, or cooperative
bank.
Eligibility Standards.
@. What are the standards of eligi-
bility for insurance of accounts?
A. The institution must be approved
as to solvency, earning capacity.
financial and lending policies, and
competence and integrity of manage
ment.
@. May one owner have insured &C
counts in more than one insured in
stitution?
A. Yes, up to $1,000 in each institu-
ton.
@. Does the corporation guarantee
earnings or a specific rate of return?
A. No.
Q. What is the cost of insurance to
the individual shareholder?
A. The shareholder does not have to
pay for it directly. He is automatically
insured if his account is held in an
insured institution. and he cannot buy
such insurance individually if his
savings are in an association which
has not been insured. The only cost
of insurance to a shareholder is paid
indirectly, being represented by the
small annual payments made by an
insured association to the corporation.
@. Does the corporation insure in
dividual mortgages?
A. No. It's sole purpose is to as
sure the safety of the accounts of
shareholders in insured institutions
A system for the insurance of indi-
vidual mortgage investments is ad-
ministered by wholly different
agency of the Government, the Fed
eral Housing Administration, for the
benefit of lending institutions of all
kinds, but an association whose
shareholders are insured by the Fed
eral Savings & Loan Insurance Corp.
is not required to place its funds in
insured mortgages.
Differences Explained.
@. What is the chief difference be-
tween the protection afforded to in
vestors in savings and loan associ-
ations by this corporation and that
offered to bank depositors by the Fed
eral Deposit Insurance Corp?
A. The Federal Savings g. Loan
Insurance Corp. inSureS the safety of
the investment; the Federal Deposit
Insurance Corp. insures the liquidity
as well as the safety of the deposit.
@. Are insured share accounts
guaranteed by the United States Gov
eminent?
A. No. They are insured by the
Federal Savings & Loan Insurance
Corp, an fundamentally of the
United States Government created
for the purpose.
@. How often will the corporation
examine insured institutions?
A. For the protection of its insured
members and other insured institu-
tons, each insured institution is ex-
amined at least once each year by the
corporation or by another public
regulatory authority. Semi-annual
reports also are required.
@. When and how is the insurance
settled by the corporation, if an in
sured institution defaults?
A. The corporation will promptly
determine the names of insured mem
bers thereof and the amount of their
insured accounts. Upon surrender and