Certified Pennsylvania Evaluator Practice Exam

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What does FIRREA stand for?

Financial Institutions Regulation and Economic Evaluation Act
Financial Institutions Reform, Recovery, and Enforcement Act
Financial Investments Regulation and Economic Reform Act
Federal Institutions Reform, Recovery, Evaluation Act

The correct answer is: Financial Institutions Reform, Recovery, and Enforcement Act

The correct expansion of FIRREA is the Financial Institutions Reform, Recovery, and Enforcement Act. This legislation, enacted in 1989, was a response to the savings and loan crisis of the 1980s and aimed to improve regulation of financial institutions, enhance consumer protection, and rebuild confidence in the nation's banking system. FIRREA established new regulatory frameworks and provided federal assistance to troubled financial institutions. It significantly restructured the savings and loan industry, led to the creation of the Resolution Trust Corporation (RTC), and enhanced the authority of the Federal Deposit Insurance Corporation (FDIC) and the Office of Thrift Supervision (OTS). Understanding the correct definition of FIRREA is crucial for evaluating its impacts on the financial landscape and regulatory practices in the United States, especially in the context of banking and financial institution oversight.