BDA Meeting - 7-21
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33 Terms
hat is the difference in purpose between a bank and a credit union?
Banks are profit
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Who owns a credit union?
Its members.
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Who owns a bank?
Its shareholders; banks may be publicly traded or privately or family owned.
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Why can credit unions often offer better rates and lower fees?
Their not-for-profit, tax-exempt structure can allow more earnings to be returned to members through favorable rates and fees.
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What is a borrower called at a credit union?
A member.
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What is a borrower called at a bank?
A customer.
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What is the difference between a customer and a client?
A customer evaluates available terms, while a client relationship may involve a fiduciary responsibility.
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Which institutions are more heavily regulated: banks or credit unions?
Banks.
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Who regulates federal credit unions?
The National Credit Union Administration (NCUA).
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Who regulates banks?
Depending on the bank's charter, regulators can include the Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), Federal Reserve, and state banking authorities.
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Can credit unions be state or federally chartered?
Yes, their regulators are applicable rules depending on the charter
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What is the CFPB?
The Consumer Financial Protection Bureau, which administers and enforces federal consumer financial protection laws.
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Why is the CFPB considered a powerful regulator?
It writes certain rules, interprets consumer financial protection laws, supervises covered institutions, and takes enforcement action.
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Why may banks object to credit unions?
Credit unions are generally exempt from federal corporate income tax, which banks may view as a competitive advantage.
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Why may credit unions object to banks?
Credit unions emphasize member service and may view banks as prioritizing shareholder profit.
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How are deposits at federally insured credit unions insured?
Through the NCUA's National Credit Union Share Insurance Fund.
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Who insures deposits at banks?
The FDIC generally insures deposits at member banks.