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This study examines fraud in the savings and loan industry as a case study of white-collar crime. Drawing from extensive government reports, Congressional hearings, and media accounts, the study categorizes three types of savings and loan crime and traces them to the competitive pressures unleashed by deregulation in the early 1980s, within the context of a federally protected, insured industry. In addition, the study delineates the limitations of the enforcement process, focusing on the ideological, political, and structural forces constraining regulators. Although savings and loan crime is in many respects similar to corporate crime in the manufacturing sector, a relatively new form of white-collar crime, referred to as “collective embezzlement,” permeates the thrift industry. The study links the proliferation of collective embezzlement and other forms of thrift crime, as well as the structural dilemmas that constrain the enforcement process, to the distinctive qualities of finance capitalism.

The savings and loan crisis of the 1980s was one of the worst financial disasters of the twentieth century. We argue here that much financial fraud of the sort that contributed to this debacle constitutes "collective embezzlement," and that this collective embezzlement may be the prototypical corporate crime of the late twentieth century. We further argue that the state may have a different relationship to this kind of financial fraud than to manufacturing crime perpetrated on behalf of corporate profits. In the conclusion, we suggest that an understanding of the relationship between financial fraud and state interests may open up new regulatory space for the control of these costly crimes. Our data come from a wide variety of sources, including government documents, primary statistical data on prosecutions, and interviews with regulators.

We attempt to make sense of the law enforcement response to the savings and loan debacle and the larger pattern of white-collar crime enforcement of which it is a part. Drawing from government documents and in-depth interviews with federal regulators and enforcement officials, we argue that the current response to savings and loan fraud is unprecedented both in terms of the extensive resources committed and the prosecution of thousands of white-collar offenders. Pointing out that this at first seems inconsistent with the government's relative tolerance of corporate crime cited in other white-collar crime studies, we borrow from state theory to explain this “crackdown.” By bringing together two traditions that have usually remained distinct—white-collar crime research and state theory—this analysis may contribute both to a better understanding of the government response to white-collar crime and to a more empirically grounded approach to the state.

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