There are three main types of financial institutions in the US
Today: Commercial banks Savings and Loans Credit Unions
Slide 5
Initially established to provide loans to businesses. **The
Banking Act of 1933 created a distinction between commercial and
investment banks, but deregulation in the 1980s and 90s did away
with that distinction. Deregulation also led to a wave of mergers,
reducing the number of banks from 12,000 in 1990 to 7,500 in 2005.
The Federal Deposit Insurance Company (FDIC - established in 1933
to insure banks) insures all commercial banks based in the US.
Slide 6
How much banks are required to keep in reserve; Set by the
Federal Reserve Board (more later)
Slide 7
Savings and Loans They began in the 1830s as a way for people
to pool their savings in a safe place to earn interest and a source
of financing for families who wanted to buy homes.
Slide 8
Cooperative savings and lending institutions that offer
services similar to commercial banks, such as savings and checking
accounts. But most credit unions specialize in mortgages and auto
loans. **Most credit unions have deposit insurance through the
NCUA, and organization similar to the FDIC. The major difference
between credit unions and other institutions is that credit unions
have membership requirements. To become a member, a person must
work for a particular company, belong to a particular organization,
or be a part of a particular community affiliated with the credit
unions.
Slide 9
Members of the US Navy Employees of Ford Members of Unions
Teachers in Spokane, WA
Slide 10
Banks provide 3 main services: Customers can store money in
accounts or store valuables in safe deposit boxes. Customers can
earn money by earning interest on accounts or making investments
through the bank. Customers can borrow money using a home mortgage,
auto loan, credit card, etc.
