Financial Institutions Reform, Recovery, and Enforcement Act of 1989 Law and Legal Definition

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) is a U.S. federal legislation that overhauled regulation and insurance of depository financial institutions in response to the savings and loan crisis of the 1980s

The FIRREA established the Resolution Trust Corporation that closed and merged troubled institutions and provided funds to pay out insurance to their depositors. It also It transferred thrift regulatory authority from the Federal Home Loan Bank Board to the Office of Thrift Supervision.

Additionally, the FIRREA created the Bank Insurance Fund that replaced the Federal Savings and Loan Insurance Corporation as the insurer of thrift deposits.