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Intro to FP > Regulation of Financial Institutions > Flashcards

Regulation of Financial Institutions Flashcards

(52 cards)

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1
Q

Deposit-type Financial Institutions

A

provide traditional checking and savings accts

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2
Q

Non-deposit type Financial Institutions

A

financial institutions other than banks

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3
Q

Federally Chartered Banks are regulated by which 3 institutions

A

-Federal Reserve
-FDIC
-Office of Comptroller of Currency OCC

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4
Q

Who would restrict the amount of interest a state bank could charge?

A

State regulators

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5
Q

State Banks are regulated by

A

Federal Reserve, FDIC, state banking authorities

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6
Q

Banks that operate under a national charter are exempt from

A

Many state banking laws and regulations such as usury laws
Fair lending laws apply to national banks

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7
Q

OCC handles what banks

A

-charters and regulates NATIONAL banks & branches of FOREIGN banks

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8
Q

OCC monitors

A

-bank capital levels
-liquidity and asset quality
-sensitivity to market risk/interest rate risk
-compliance

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9
Q

Services Commercial Banks Offer

A

-checking and savings accts
-credit cards
-safety deposit boxes
-financial consulting
-all types of lending services

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10
Q

Whats another name for a Savings and Loan institution

A

Thrift

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11
Q

Savings and Loans or Thrifts

A

-borrow money from depositors
-lend it out primarily as mortgages

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12
Q

Corporate Savings and Loan depositors receive what

A

interest rather than dividends, just like a commercial bank

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13
Q

Mutual Savings and Loan depositors receive what

A

dividends rather than interest

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14
Q

Savings and Loans regulated by what 4 agencies and what else

A

FDIC, OCC, CFPB, Federal Home Bank Board
state agencies if they are state chartered

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15
Q

What is an advantage of a Savings and Loan savings account

A

it may earn up to a quarter point more interest than a commercial savings account

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16
Q

Savings Banks are owned by whom

A

depositors - basically making them a mutual savings bank

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17
Q

Primary Purpose of Savings Bank

A

provide mortgages

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18
Q

What do Savings & Loans have in common with Savings Banks?

A

Primarily issue mortgages

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19
Q

What agency oversees Savings & Loans and Savings Banks?

A

The Financial Stability Oversight Committee

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20
Q

Community banks have less than how much assets?

A

1 Billion

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21
Q

Who owns a credit union?

22
Q

Credit Unions operate how (what type of biz)

Study These Flashcards
A

Not for profit with membership requirement

23
Q

Who insures accounts at credit unions?

Study These Flashcards
A

National Credit Union Administration insures accounts up to 250k

24
Q

How do credit unions raise capital?

Study These Flashcards
A

Retaining earnings

25
FDIC can force change in mgmt or policy if what happens?
if the banks risk-based capital ratio falls under 6%
26
When can the FDIC take over a bank?
If the bank becomes critically undercapitalized 2% or below
27
FDIC insures what 2 types of banks
commercial banks and S&Ls
28
Say a couple owns a CD in a joint account worth $550k - what portions are insured
Since its a joint account their shares are divided up equally as 275k They EACH have insurance of 250k. They EACH have 25k that is uninsured
29
SIPC insures what and how much
replaces missing stocks and other securities up to 500k including 250k in cash if a member brokerage or bank brokerage fails
30
Other names for savings account
time deposit or passbook account
31
Money Market Acct
market rate interest sensitive acct that invests in money market instruments like commercial paper, T Bills, repurchase agreements etc.
32
Certificate of Deposit
debt instrument issued by a bank that pays a fixed rate of interest keeps funds on deposit for a set period of time
33
Full Service Broker
-take buy and sell orders -extend margin -hold securities for safekeeping -collect cash dividends -offer research and planning advice
34
Discount Broker
-take orders from clients -little or no investment advice -extend margin -hold securities -accumulate cash and dividends -Schwab
35
Deep Discount Broker
-electronic broker that takes orders online
36
Governing federal insurance law
Mccarran-Ferguson act
37
What did the Mccarran Ferguson act do?
turns over regulation of insurance industry to the states
38
2 laws that effect the continuation of health coverage
COBRA HIPPA
39
Office created under dodd frank re:insurance
Federal insurance office
40
What doesnt the federal insurance office monitor
-health insurance -some long term care -insurance -crop insurance
41
What does federal insurance office monitor
-all aspects of ins industry -underserved communities -recs to FSOC about risky insurers -admin terrorism insurance program -international ins matters -determine if state ins measures are preempted by covered agreement -consulting with states
42
Who can sponsor a retirement plan?
An employer, union or individual
43
Function of pension and retirement plans
combine a % of your pre retirement earnings with SS and private savings
44
Institutions that administer retirement plans
-part of a mutual fund co -insurance co or asset management co subsidiary
45
2 types of sponsored plans
defined benefit defined contribution
46
Defined contribution plan
-each employee has acct that the employer and usually employee makes contributions -employee DEFINES how much is put into plan
47
Who defines the contributions on a def cont plan
the employee
48
A pension is what type of plan
defined benefit
49
Defined benefit plan
pension benefit is determined by a formula takes into account years of service, and in most cases wages or salary
50
3 types of defined benefit formulas
flat amount flat percentage unit credit
51
Who absorbs the investment risk on a defined benefit plan
The sponsor or an insurance company
52
What is required for defined benefit that is not for defined contrib.
Annual actuarial assessment

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