SecLaw-FICO-Credit Flashcards
(49 cards)
Who issues new issues to the public
New issues are issued by SEC
What are the two financial markets
Money Market and Capital Markets
Money Markets
concentrate on short-term debt instruments
Secondary markets
Secondary market is where previously issued securities trade among investors.
The key differentiator is that the issuing company is NOT directly involved.
Secondary markets and issues are regulated by the Securities Act of 1934.
Secondary markets take two forms:
Organized exchange (i.e., New York Stock Exchange)
Over the Counter (OTC) market (i.e., NASDAQ)
Primary Market
Primary market is where new securities are issued and sold to the public for the first time
Securities are registered with the SEC and sold to clients through the initial public offering (IPO) process.
Issuing firm is the recipient of proceeds.
Primary markets and issues are regulated by the Securities Act of 1933.
Sec Act of 1933
registration of initial public offerings
Glass Steagall Act of 1933
prohibition of financial institution consolidation and offering any combination of traditional commercial banking, investment banking and insurance
Right to know costs and terms of credit
Consumer credit protection act
Right to fair opportunity to obtain credit
Equal Credit Opportunity Act
Borrower must receive response from creditor in 30 day with approval or denial; if denied, creditor must give reason or explain your right to an explanation
Right to know what’s in your credit file
fair credit reporting act
If you are denied credit, the Fair Credit Reporting Act entitles you to a fair and accurate credit report.
right to have billing mistakes resolved
fair credit billing act
right to be protected from collection agencies
Fair debt collection practices act
lenders to disclose the true cost of consumer credit, explaining all charges, terms and conditions involved.
Truth in Lending Act, 1968
Monetary Policy
Fed Controls Money = Controlled by the Federal Reserve Bank (the Fed)
Controls the money supply (Buy/Sell Treasure Securities),
influences lending rates (Discount Rates),
may slow down or stimulate the economy (controlling reserve reqs)
Fiscal policy
Congress controls FisCal Policy
Refers to the taxation, expenditures, and debt management by Congress
FDIC
Per Institution, Per Ownership Type AND Per person
First split by institution, then split/bucket by ownership type and than bucket by per person
Split the joint A/C Amount
Credit score
tells lenders about a person’s creditworthiness (i.e., how likely they are to pay back a loan based on credit history)
FICO® Score Categories
Payment history (35%)
Amounts owed (30%)
Length of credit history (15%)
New credit (10%)
Credit mix (10%)
Amounts owned accounts for what % of an individual’s credit score?
30%
Credit utilization = amount credit used from amount of credit available. The more credit it utilized the more overall credit score will be lowered
How many years will it take for anything falls of the credit report?
7 Years
FICO Score - Poor Rating
< 580
Well below Avg.
Demonstrates to lenders that you are a risky borrower
FICO Score - Fair
580-669
Below Avg.
Many lenders will approve loans
FICO Score - Good
670 - 739
Near or slightly above avg.
Most lenders consider this a good score
FICO Score - Very Good
740 - 799
Above Avg.
Demonstrates to lenders you’re very dependable borrower
