2. CHAPTER 11Slide 1 of 6 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

3. CHAPTER 11Slide 2 of 6 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)

4. CHAPTER 11Slide 3 of 6 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

5. CHAPTER 11Slide 4 of 6 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

6. CHAPTER 11Slide 5 of 6 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

7. CHAPTER 11Slide 6 of 6 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.