Term of the Day
A corporate structure that combines elements of a mutual savings association, which is structured so that its depositors, and in some cases its borrowers, have the right to elect the board of directors, with elements of a stock savings and loan, which is owned by its shareholders. In a mutual holding company setup, association depositors have the right to elect directors of the mutual holding company, which in turn holds a majority of the voting stock of its subsidiary savings association. The balance of the thrift's stock can be sold to outside investors to raise capital. Mutual holding companies were first authorized by the Competitive Equality Banking Act of 1987 (CEBA). Those provisions were clarified by Congress in the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).