Chapter 11. FINANCIAL INSTITUTIONS

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Chapter 11. FINANCIAL INSTITUTIONS
Their services and how they work Your legal and
financial rights
A. Your Choices, the Role of the Middlemen and
Deposit Insurance 1. Commercial Banks 2.
Mutual Savings Banks 3. Savings and Loan
Associations 4. Credit Unions 5. Small Loan
Companies 6. Payday Loan Companies 7.
Merchant Lenders and Credit Card Companies 8.
Insurance Companies 9. Financial Planners
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B. Services Available at Financial
Institutions
1. Checking Accounts and How They Work a.
Negotiating a check b. Cashing a check c.
Depositing a check d. Clearing a check e.
Using and endorsing a check f. Stopping
payment g. Overdrafts h. Keeping track of
your account i. The statement and
reconciliation j. Shopping for a checking
account (See Personal Action Worksheet,
Text page 296)
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2. Savings Plans a. Passbook accounts b.
Certificates of Deposit (CDs) c. Money Market
accounts 3. Safe Deposit Facilities 4. Trust
Services 5. Special Checks 6. Notary
Services 7. ATMs 8. Collection Services 9.
Debit Cards 10. Investment Departments
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C. Laws that Govern Financial Institutions and
Their Transactions
1. State Laws a. Negotiable Instruments
Laws b. Usury Laws c. Secured Transaction
Laws 2. Federal Laws a. Truth in Lending
Law b. Truth in Savings Law c. Fair Credit
Billing Law d. Fair Credit Reporting Law e.
Equal Credit Opportunity Law f. Fair Debt
Collection Practices Law
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TALKING POINTSChapter Eleven, Number One

• Youre shopping around for a bank to set up your
  checking and savings accounts, and one that can
  lend you money if and when you need it. How
  would you rate the prospects that your homework
  has uncovered? Assume the 3 banks charge the
  same and pay the same interest on savings plans.

• A. Bank A - Nationally known name, every banking
  service you could ever need, always long
  queues at the teller windows, their 24/7
  customer service telephone line takes forever
• B. Bank B - Very small local bank, pleasant
  staff, full range of services, nearest branch
  is 4 miles away (whereas the other prospects all
  have branches within 1 mile)
• C. Bank C - used to be a Savings and Loan, only
  lends money when loan secured by mortgage on
  borrowers property, otherwise is best of bunch
• D. Credit Union which youre eligible to join -
  office is in the building you work in, only keep
  strict 9-5 weekday hours, dont have an ATM,
  services cost less than the 3 banks and they pay
  slightly higher interest on savings

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TALKING POINTSChapter Eleven, Number Two
Youve had a run of bad luck. Your brother
finally repaid the 1,000 that he owed you and
you deposited his check in your Bank account.
You then wrote checks against it to pay your
monthly credit card debt and your car payment.
But your brothers check bounced, and thus, so,
did your checks. The credit card company now is
charging late fees and threatening to cancel your
account, the loan company threatens to send out
one of its goons to repossess your car, and the
bank is charging you 30 for the bounced checks.
And when all of these details get into your
credit history there will be a real mess. Discuss
what steps you might have taken to avoid all the
hassle, and what laws might protect you if worse
comes to worse.