1. Chapter 12 Money and Financial Institutions
12.2
Types of Financial Institutions

2. Commercial Banks
Commercial Banks: offer the entire range of banking services, such as checking and savings accounts, loans, and financial advice.
Often called full-service banks.
Make money by charging more interest on the money that they lend than the interest that they pay on bank accounts.

3. Savings and Loan Associations
Savings and Loans Associations: financial institutions that hold customers’ funds in interest-bearing accounts and invest mainly in mortgage loans.

4. Credit Unions
Credit Unions: are not-for-profit banks set up by organizations for their customers to use.
Usually offer the same products and services as a commercial bank.

5. Other Financial Institutions
Mortgage Companies: provide loans specifically for buying a home or business.
Finance Companies: offer short-term loans to businesses and consumers, but at a much higher interest rates and shorter terms.
Insurance Companies: not only provide protection against problems such as fire and theft, but they also offer loans to businesses and consumers.
Brokerage Firms: they sell stocks and bonds and may also offer a wide range of financial services to their customers.

6. The Federal Reserve System
Federal Reserve System: the central bank of the United States. It monitors the money supply.
Six functions
Clearing Checks
Acting as the Federal Government’s Fiscal Agent
Supervising Member Banks
Regulating the money supply
Setting reserve requirements
Supplying paper currency

7. Homework Complete Sect. 12.2 Reading Activity and Graphic Organizer
Review questions on pg. 205, 1-3
Homework due Friday before quiz
Quiz Friday