The statement given in your question is not true. Savings and loan associations (also known as S&Ls) are definitely subject to federal regulations.
Savings and loan associations, it is true, are not as closely regulated as banks are. However, they are still subject to some regulation by federal agencies such as the Federal Deposit Insurance Corporation (FDIC). Many of the regulations that apply to the savings and loan industry come out of the Savings and Loan Crisis of the 1980s.
So, while savings and loan associations are not regulated as heavily as banks, they are still subject to federal regulation.
Savings and loan associations are subject to federal regulations. The Dodd-Frank Act transferred jurisdiction and regulation over savings and loan holding institutions to the Federal Reserve from the Office of Thrift Supervision in 2011. By regulating the holding institutions, the Federal Reserve would also regulate the savings and loan associations.
The Federal Regulations are provided under (12) U.S. Code 1464, and they state:
- A Federal savings association is not allowed to issue or incur overdrafts on behalf of its affiliates.
- The savings associations are permitted to establish remote service units.
- The associations are accorded the ability to borrow or offer security or serve as surety.
Most of the regulations that have been established to regulate savings and loan association are designed to work similarly to those regulating the national banks. However, it is important to state that in some provisions, national banks have greater access where associations are automatically barred.