Exam 3: Financial Services: Finance Companies

Sales finance institutions compete directly with depository institutions for consumer loans.

Equipment leasing to customers is a function of business credit institution.

As the economic expansion continued through the 1990s,the demand for finance company loans increased.

Prior to the financial crisis that began in 2007,finance companies

Which of the following is NOT true?

Business loans represent 50% of the loan portfolio of finance companies.

The typical customer of a payday lender has income of between $25,000 and $50,000 per year.

A finance company that lends money to high risk customers is known as a subprime lender.

The parent institution provides a large portion of the debt that a captive finance company will use to generate personal loans.

Finance companies differ from banks in that they do not accept deposits.

Compared to commercial banks,finance companies usually signal solvency and safety concerns by

As of 2015,which of the following is true concerning payday lending?

A company that provides financing to corporations,especially through equipment leasing and factoring would best be categorized as a

The growth in home equity lines of credit over the last two decades has occurred in part because of the tax deductibility of the interest payments.

Which of the following might lead a consumer to seek a loan from a subprime lender?

Major finance companies did not suffer as much from the recent financial crisis as depository institutions primarily because they are forbidden from creating home mortgages.

Finance companies often prefer to lease equipment to customers because

Bad debt expense and administrative costs are lower on home equity loans than other typical loans of finance companies.

Finance companies generally have higher overhead than do commercial banks.

Personal credit institutions specialize in making equipment leases to consumers.