Chapter 1 Terms Flashcards
Offer financial services to members who must share a common bond, such as being teachers or federal employees. They are exempt from federal taxes and often occupy employer provided facilities.
Credit unions
Also known as savings associations and savings & loan associations. They focus on providing checking and savings accounts, loans, and residential mortgages to consumers.
Savings Institutions
Arrange contracts for customers to purchase stocks, bonds, and mutual funds. Their products do not carry federal deposit insurance.
Brokerage Firm
Provide a small open line of credit for purchases.
Credit Card Companies
Specialize in making small to medium sized loans to consumers or small businesses. The most common are personal finance and captive finance companies (such as Ford Credit or GM Financial).
Finance Companies
Sell risk protection. They accumulate funds received from premiums and place them in relatively risk-free, long term investments.
Insurance Companies
Organized collection of investment funds. Their sole activity is investing funds, usually in a diversified securities portfolio. Investors buy shares from a fund and sell them back to the fund directly rather than through a securities exchange.
Mutual Funds
Invest in portfolios of securities, but only in short term instruments, typically with a 3 month average maturity such as certificates of deposits, commercial paper, bankers acceptances, and U.S. treasury bills.
Money Market Funds
Specialize in financing loans backed by real estate. Typically mortgage companies sell their loans into the secondary market, rather than holding them in portfolio.
Mortgage Companies
Cash checks for consumers for a fee and also provide remittance transfer and other money services.
Money Service Business
Financial companies that offer banking services without a banking license. They often specialize in specific sectors or groups, and provide services that banks may not be well-suited to. They do not offer traditional deposit tools like checking and savings accounts. Examples include: Paypal, Zelle, and Venmo.
Non bank providers
