A significant part of the problem was that the S&L regulatory model of the 30s - 60s assumed low regulated interest rates and when the low rates could no longer be sustained, the response to that was badly handled by both regulators and the S&Ls themselves.
^^^
This. There were two S&L crises-- the first at the end of the 1970s due to Regulation Q (deposit interest rate caps) and the prohibition on variable rate mortgage lending; the second through the 1980s as a result of the deregulations enacted in response to the first, which resulted in moral hazard, excessive competition for deposits, and real estate overlending.
