Final answer:
Savings and loan associations were initially created to support homebuilders and buyers by providing savings facilities and mortgage loans. They faced heavy regulation until the 1980s when deregulation led to a financial crisis requiring a substantial government bailout.
Step-by-step explanation:
The original purpose of savings and loan associations (S&Ls) was to provide a means for individuals, particularly homebuilders, to save and borrow money, primarily for the purpose of purchasing homes. They emerged as an alternative to commercial and savings banks in the 1800s and primarily invested in housing mortgages. Members would deposit their savings and have the opportunity to borrow money for home construction, with the S&L lending out deposits as mortgage loans.
From the 1930s to the 1980s, they were subject to federal regulations which limited the amount of interest they could pay on deposits and required that the bulk of their loans be housing-related. The S&L crisis of the late 1980s and early 1990s, resulting from deregulation and risky loan practices, led to a costly government bailout exceeding $150 billion to protect the savings of depositors.