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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 Banks2. Mutual Savings Banks3. Savings and Loan Associations4. Credit Unions5. Small Loan Companies6. “Payday” Loan Companies7. Merchant Lenders and Credit Card Companies8. Insurance Companies9. Financial Planners

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B. Services Available at Financial Institutions

1. Checking Accounts and How They Worka. “Negotiating” a checkb. Cashing a checkc. Depositing a checkd. Clearing a checke. Using and endorsing a checkf. Stopping paymentg. Overdraftsh. Keeping track of your accounti. The statement and reconciliationj. Shopping for a checking account (See Personal Action Worksheet, Text page 296)

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2. Savings Plansa. Passbook accounts b. Certificates of Deposit (CDs)c. Money Market accounts

3. Safe Deposit Facilities4. Trust Services5. Special Checks 6. Notary Services7. ATMs8. Collection Services9. Debit Cards10. Investment Departments

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C. Laws that Govern Financial Institutions and Their Transactions

1. State Lawsa. Negotiable Instruments Lawsb. Usury Lawsc. Secured Transaction Laws

2. Federal Lawsa. Truth in Lending Lawb. Truth in Savings Lawc. Fair Credit Billing Lawd. Fair Credit Reporting Lawe. Equal Credit Opportunity Lawf. Fair Debt Collection Practices Law

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TALKING POINTS…Chapter Eleven, Number One

You’re 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 you’re eligible to join - office is in the building you work in, only keep strict 9-5 weekday hours, don’t have an ATM, services cost less than the 3 banks and they pay slightly higher interest on savings

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TALKING POINTS…Chapter Eleven, Number Two

You’ve 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 brother’s 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.