Chat with AIExam 14: Other Lending Institutions: Savings Institutions, credit Unions, and Finance Companies
The American Bankers Association and others are seeking to limit growth of credit unions. What is the basis for the bankers' concern? What does the credit union industry argue? What kind of limits on credit unions are the bankers seeking?
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VerifiedThe bankers are arguing that credit unions can unfairly compete with banks for consumer loans and deposits because credit unions are not taxed. The tax advantage allows credit unions to offer higher rates on deposits and lower rates on loans in most cases. The common bond requirement is designed to limit competition among credit unions (each other)and between banks and credit unions. Historically,credit union members were sponsored primarily by an employer,and most people could not participate in a credit union. The weakening of the common bond requirement and the growth of credit unions have brought this industry into more direct competition with banks for consumer banking services. Banks are seeking to limit growth of credit unions by limiting credit unions' ability to accept new members and to limit the number of community-based credit unions. Community-based credit unions represent the greatest threat to banks because their "common bond" is very broad,namely to live and/or work in a given community.
How do sales finance companies differ from personal credit and business credit institutions? List an example of each.
(71) VerifiedSales finance companies,such as Ally Financial (formerly GMAC)or Ford Motor Credit,specialize in making loans to customers of a specific retailer or manufacturer; personal credit institutions specialize in loans to consumers,usually to riskier customers. An example of the latter is HSBC Finance. Business credit institutions such as Heller Financial provide financing to corporations via leasing and factoring.
Which of the following trends in the number and industry assets of savings institutions is/are correct?
I. The number of savings institutions has fallen over time.
II. The number of savings institutions has increased over time.
III. Total industry assets fell during the recession of the late 2000s.
IV. Total industry assets are falling over time.
V. Total industry assets are stable but the number of savings institutions has fallen.
(84) VerifiedB
Which one of the following has the highest concentration of mortgage-related assets on the balance sheet?
(78) Savings institution deposits and bank deposits are backed by two different insurance funds.
(73) Aggregate finance company profitability was poor in the late 2000s primarily due to which segment of the finance company industry?
(66) A loan agreement between Ford Motor Credit and a local Ford dealer is an example of
(80) Has the importance of foreign nonbank financial lending been increasing or decreasing in recent years? Provide some examples to back up your answer.
(79) Finance companies enjoy several advantages over banks. These include all but which one of the following?
(84) 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.
(92) Finance companies rely primarily on bank loans and commercial paper as source of funding.
(86) In 2016,________ had on average the greatest amount of equity as a percentage of assets and ________ had the lowest.
(74) Why have larger credit unions experienced greater profitability than smaller credit unions? Do you expect this to continue? Why or why not?
(79) Home equity loans are popular with finance companies. Which one of the following statements about home equity loans is not correct?
(88) What are the advantages of a finance company or a bank leasing equipment to a small business customer rather than financing the customer's purchase of the equipment?
(86) After 2011,savings institutions have primarily been regulated by
(93) A finance company that makes loans to high-risk customers is called a
(80) Which one of the following institutions is the least regulated?
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