Thrift Institution Prudent Investment Act of 1988

Thrift Institution Prudent Investment Act of 1988 - Requires the Federal Home Loan Bank Board (FHLBB) to prescribe regulations to limit the extent to which any insured thrift institution may make direct investments. Specifies that under such regulations the aggregate amount of direct investments of any insured thrift institution may not exceed the aggregate amount of direct investments which an insured bank may make under regulations prescribed by the appropriate Federal banking agencies. Exempts from such regulations certain State thrift institutions. Sets forth transitional rules.

Prohibits an insured thrift institution which has a capital-to-assets ratio of five percent or less from making any loans or investments other than home loans secured by real property and certain other specified loans and investments.

Reduces from $100,000 to $20,000 the Federal deposit insurance coverage for an insured thrift institution which has a capital-to-assets ratio of ten percent or less.