1<br > PAST DECISIONS<br > CREATE<br > PRESENT<br > OPPORTUNITIES<br >THE 1980s CREDIT CRUNCH<br > Bartlells attributes to France s Alex De Tocqueville the following:<br > "America is a land of wonders， in which everything is in constant<br >motion and every change seems an improvenlent. The idea of novelty is<br >there indissolubly connected with the idea of amelioration. No natural<br >boundary seems to bc set to the efforts of man; and in his eyes what is not<br >yet done is only what has not been attempted to do."<br > The thrift induslry of our country look De Tocqucville s words to<br >heart. They felt lhcir quest fl， r increased profits was connected to being<br >able m their abilily to directly compete with their banking cotmterparts.<br >When things gol a little tight for them， their powerful lobbying ann was<br >putting the pressure on Congrcss to do just that.<br > Whal Ihe entire financial community failed Io realize was the fact that，<br >if they kept their investment and lending houses in order， financial<br >instilutiCms had a legislatively guaranteed profit under the former Federal<br >Reserve Regulation Q， which set a ceiling on interest rates that financial<br >inslitutions could pay depositors. For years， characteristically， thrifts<br >would set an approximate 2% margin between the cosl of money and<br >mortgage rates as their profit margin with consumer type financing for<br >home improvements and construction financing being the frosting on their<br >return on equity cake.<br > During the 1970s， however， a new word creeped into the vocabulary of<br > financial institutions -- "disintcrmediation." The unpardonable had<br > happened Depositors were no hmgcr satisfied with the regulated interest<br > rate ceilings in their savings accounts. They were no longer satisfied with<br > no relurn on sizeable checking account balances. As a result， depositors<br > started withdrawing in droves to seek higher yielding instruments such as<br >