Question

1) The major provisions of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 included:

I. Establishing the Resolution Trust Corporation to manage and liquidate insolvent thrifts
II. Expanding the responsibilities of the FDIC and deposit insurance
III. Implementing new lending restrictions

Select one:

A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III

2) The major provisions of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 included:

I. Establishing the Resolution Trust Corporation to manage and liquidate insolvent thrifts
II. Increased deposit insurance
III. Implementing new lending restrictions

Select one:

A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III

Answer 1

1) E. I, II, III

The above three are the major provisions of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 as FIRREA established Resolution Trust Corporation to liquidate or close insolvent thrifts and to provide adequate funds to insurance depositors. Federal Deposit Insurance Corporation (FDIC) was established to support this provision and provides deposit insurance to depositors. Federal Housing Finance Board was created to oversee home loan lending by home loan banks. By establishing these boards FIRREA is implementing new lending restrictions.

2) E. I,II,III

This answer includes all the above reasons as the second part 'Increased Deposit Insurance' is a major provision of FIRREA and created FDIC in support of funds to insurance depositors.