What Is a Thrift Charter?

What Is a Thrift Charter?
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A thrift charter is a banking charter for lending institutions that are charged with the specific mission of promoting and bank rolling home ownership. In many respects, they operate just like any other bank; however, there are a few key distinctions.

Home Loans

While a thrift bank may also handle commercial loans and personal accounts, home loans are the backbone of a thrift bank's charter. To maintain their charter, a thrift bank most hold over 65% of their assets in housing-related investments.


Unlike commercial banks, which are chartered by states and approved by the Federal Reserve, thrifts are chartered by the Office of Thrift Supervision (OTS), or through state governments following OTS guidelines. The OTS is responsible for examining thrift institutions every 12 to 18 months to ensure their soundness.

Depositor Insurance

Thrifts are insured by the Deposit Insurance Fund (DIF), which is administered by the FDIC.

Other Names

Thrifts are also known as savings and loan associations and savings banks. These banks became known as thrifts because they originally only handled savings accounts and home mortgages.