Savings institutions or savings banks accept deposits and provide personal and auto loans, as well as issue credit cards and mortgages. They tend to focus less on commercial loans than commercial banks. As with commercial banks, deposits are insured by the FDIC up to $250,000 per account.
Prior to 1980, savings institutions were legally limited to only offering checking and savings accounts, and their lending was restricted to mortgages. Following World War II, they paid 3% on deposits and lent mortgages at 6%. Then in 1979, Paul Volker, chair of the Federal Reserve Bank, raised short-term interest rates to 17% to control excessively high inflation. This rate stayed high for years, going up to 19% in 1980 and 1981. This caused disintermediation at the savings institutions, causing them to raise the rate to 8% on savings accounts in order to stay competitive. However, most of their money was already lent out at 6% for thirty-year mortgages. This was a recipe for bankruptcy.
The U.S. Government had to bail out the industry, costing taxpayers about $100 billion (though this now seems like a bargain compared to the massive bailout during The Great Recession). In 1980, there were more than 4,500 savings institutions insured through federal or state government programs. As of December 2017, FDIC data reveals that only 752 remained.