Bank Operation
BNKG 1303
Session 15 - Financial Institutions
|
As we have gone through this course this past semester - we have used the term Bank in its generic sense. That is - we referred to a Bank any time that we were talking about a financial institution that provided 'banking' type transactions. It is important to note that not all Financial Institutions - are the same. |
|
| Most consumers tend to lump all financial institutions into the same category - but for those of us in the industry - we know there are different types - each with their own unique outlook on this business. | |
|
Banks
|
Banks - those financial institutions with Bank in their name still come in different types |
| Charters - under the Dual Chartering system that exists in the United States, Banks can be chartered as both National Banks and State Banks. Their are legal distinctions between each National and State charters - and the bank's Board of Directors must analyze the powers and limitations available under each type before obtaining their charter. One simple difference - is that a State chartered bank - cannot branch into another state without obtaining appropriate State Banking permission, usually a charter to business in that state. State banks are subject to State Banking regulations and regulatory approvals - where a National Bank is not. | |
|
Commercial vs Retail - smaller banks will often choose to specialize in providing services either to the commercial customer or to the retail (you and me) customer. Most all banks provide services to both - but I know of one bank who specializes in commercial services and prefers to only open accounts for those consumers who are somehow related to their commercial accountholders - either the owners or employees etc. They really don't advertise retail banking services but provide them only as necessary for their commercial customers. Other banks will chose to be a 'family' bank - preferring to serve their communities by taking care of the financial needs of individuals and families. Again, there are advantages to both types - from a management viewpoint. Banks specializing in commercial accounts can grow larger - faster, since they make BIG loans - but can also get into trouble faster - if those BIG loans go bad - or they are in either an physical area or lending to a similar group of industries - that have economic problems at the same time. All Banks are insured by the Bank Insurance Fund - or BIF - a part of the Federal Deposit Insurance Corporation. |
|
| Thrifts | Includes Savings & Loans and Savings Banks - State and Federally chartered. |
|
Charters - like 'Banks', most all thrifts can be chartered under the dual chartering can obtain their charters from either the appropriate state regulatory agency or the Office of Thrift Supervision. All Thrifts, both Savings & Loans and Savings Banks are insured by the Savings Association Insurance Fund - or SAIF - also a part of the Federal Deposit Insurance Corporation |
|
| Credit Unions | Includes both State and Federal Credit Unions |
|
Charters - can be by either the appropriate state regulatory agency or the National Credit Union Administration (NCUA). Unlike all other banking institutions, All Credit Unions are insured by the National Credit Union Administration (NCUA) - who serves as both the sole regulator AND deposit account insurer. |
|
| It is important to note that different states - have different regulatory bodies for the various types of financial institutions. Texas has a different regulatory agency for Banks, Credit Unions, Insurance Companies, Savings Banks and Savings and Loans. These agencies may either be independent or part of another agency. In fact, the Finance Commission of Texas - not only regulates state chartered banks - but also finance companies and even prepaid funeral programs. | |
|
Internet Banking Resources
|
|
| State Banking Regulatory Links | |
| State Credit Union Regulator Links | |
| Texas Finance Commission | |
| Texas Credit Union Department | |
| Texas Savings and Loan Department | |
| Conference of State Bank Supervisors (CSBS) | |
| Federal Deposit Insurance Corporation (FDIC) | |
| Office of the Comptroller of the Currency | |
| Office of Thrift Supervision | |
| There is no chapter for this session - hence no chapter notes. |
|
There is NO specific assignment for this session. |
| For each session, you must answer completely ONE of the questions provided, and email your response to the instructor by midnight the Friday of the session week. While answers should be developed fully, it is anticipated that each answer should be approximately one page in length. |
| There are no Study Questions for this chapter. |