The Garn-St. Germain Depository Institutions Act, formally known as the Garn-St. Germain Depository Institutions Act of 1982, is a U.S. federal law that was enacted to address the challenges faced by savings and loan associations (S&Ls) during the 1980s. The legislation was named after its sponsors, Senator Jake Garn and Representative Fernand St. Germain. The act was signed into law by President Ronald Reagan on October 15, 1982.

The Garn-St. Germain Act aimed to revitalize the troubled savings and loan industry, which was experiencing financial difficulties and a wave of insolvencies at the time. Some key provisions of the act include:

1. **Granting Broader Lending Powers:** The act provided savings and loan institutions with expanded lending powers, allowing them to diversify their loan portfolios beyond traditional home mortgages. This was intended to help S&Ls compete more effectively with other financial institutions.

2. **Authority for Adjustable-Rate Mortgages (ARMs):** The act authorized the creation of adjustable-rate mortgages (ARMs), providing flexibility in the interest rates charged on mortgage loans. ARMs have interest rates that can vary over time based on changes in market interest rates.

3. **Relaxation of Regulatory Restrictions:** Garn-St. Germain aimed to ease regulatory restrictions on savings and loan associations, providing them with greater flexibility in managing their operations and addressing financial challenges.

4. **Expansion of Deposit Insurance:** The act increased the maximum deposit insurance coverage provided by the Federal Savings and Loan Insurance Corporation (FSLIC) from $40,000 to $100,000 per account. This was intended to reassure depositors and stabilize the banking system.

5. **Net Worth Certificate Program:** The act introduced a Net Worth Certificate program to allow financially troubled S&Ls to raise capital by issuing certificates to the Federal Savings and Loan Insurance Corporation.

While the Garn-St. Germain Act was intended to address the issues facing the savings and loan industry, it also faced criticism for contributing to the broader savings and loan crisis of the 1980s and early 1990s. The crisis resulted in the failure of many savings and loan institutions, substantial financial losses, and the eventual creation of the Resolution Trust Corporation (RTC) to handle the resolution and liquidation of failed S&Ls.

The savings and loan crisis and the events leading up to it prompted further regulatory reforms in the financial industry, including the passage of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) in 1989.