Exam 14: Other Lending Institutions: Savings Institutions, Credit Unions, and Finance Companies

_____________ are the most diversified of depository institutions and ______________ are on average the largest depository institutions.

Why have postal savings institutions flourished in many foreign countries? What unique advantages do they have and what services do many offer?

Rank the following from greatest to smallest in terms of industry asset size in 2010. I. Banks II. Savings institutions III. Credit unions IV. Finance companies

For the finance company industry as a whole,the largest single loan type is

Credit unions are I. mutual associations. II. not open to the general public. III. for profit institutions.

Sales finance institutions specialize in loan sales to banks and thrifts.

A savings institution (SI)has funded $12 million of 30-year fixed-rate mortgages with an average interest rate of 5.75 percent. These assets are funded with time deposits with an average maturity of six months. The deposits are currently paying 3.5 percent. In six months' time,however,the Fed has raised interest rates twice and the depositors now must be paid 4.25 percent. What will happen to the SI's ROA and NIM? How would your answer change if the SI normally sells the mortgages every six months and originates additional new mortgage loans?

Because of the differences in the makeup of their major loan types,finance companies typically have shorter-term loans than banks.

Why have larger credit unions experienced greater profitability than smaller credit unions? Do you expect this to continue? Why or why not?

Finance companies obtain a significant portion of their short-term financing from

The predominant liabilities for savings institutions are

Credit unions have several advantages over banks. These include the following: I. Credit unions are not taxed. II. Credit unions are better diversified than banks. III. Credit unions can collectively pool funds. IV. Due to regulations,credit unions have better economies of scale and scope than banks. V. Because of their ties to employers credit unions have better personnel expertise than banks.

A finance company that makes loans to high-risk customers is called a

How do sales finance companies differ from personal credit and business credit institutions? List an example of each.

Deposits at savings banks are backed by the _______________ and deposits at savings institutions are backed by the ______________.

In dollars,how many subprime mortgages were originated in relation to the total mortgage market in 2006? How has the subprime crisis affected the profitability of finance companies? Are all finance companies equally affected? Explain.

In a mutual organization,the depositors are owners of the institution.

The U.S. Central Credit Union and the corporate credit union

There are more credit unions than other types of thrifts,but credit unions are generally smaller than other types of thrifts.

A captive finance company is one that