VI. Complete the text using these words:
BANKING INSTITUTIONS
banking institutions bank holding companies stockholders
savings and loan associations
mutual savings banks commercial banks thrift institutions financial services
savings banks mutuals credit unions dividends
... include commercial banks, savings and loan associations (SLAs), savings banks, and credit unions.
... are so named because they specialize in loans to commercial and industrial businesses. Commercial banks are owned by private investors, called (3)
or by companies called (4) .... (It is a corporation that exists only to hold shares in another company.) In 2000, 76 percent of banks in the USA were owned by holding companies. Commercial banks are "for profit" organizations. Their objective is to make a profit. The profits either can be paid out to bank stockholders or to the holding company in the form of (5) or the profits can be retained to build capital (net worth).
(6) ... (S&Ls) are usually owned by stockholders, but they can be owned by depositors as well. (If owned by depositors, they are called (7) "...".) If stock owned, the goal is to earn a profit that can either be paid out as a dividend or retained to increase capital. If owned by depositors, the objective is to earn a profit that can be used either to build capital or lower future loan rates or to raise future deposit rates for the depositor-owners. Until the early 1980s, regulations restricted S&Ls to investing in real estate mortgage loans and accepting savings accounts and time deposits (savings accounts that exist for a specified period of time). As a result, historically S&Ls have specialized in savings deposits and mortgage lending.
Traditional (8) also known as (9) ... (MSBs), have no stockholders, and their assets are administered for the sole benefit of depositors. Earnings are paid to depositors after expenses are met and reserves are set aside to insure the deposits. During the 1980s savings banks were in a great state of flux, and many began to provide the same kinds of services as commercial banks.
Since 1982 savings banks have been permitted to convert to S&Ls. S&Ls also may convert to savings banks. Both S&Ls and MSBs can now offer a full range of (10) including multiple savings instruments; checking accounts; consumer, commercial, and agricultural loans; and trust and credit card services.
(11) ... are not-for-profit, cooperative organizations that are owned by their members. Their goal is to minimize the rate members pay on loans and maximize the rate paid to members on deposits. Whatever surplus is earned is retained to build the capital of the credit union. Members must share a common bond. That bond is typically employment (members all work for the same employers) or geography (members all live in the same geographic area). Historically, credit unions specialized in providing automobile and other personal loans and savings deposits for their members. However, more recently credit unions have offered mortgage loans, credit card loans, and some commercial loans in addition to checking accounts and time deposits.
Credit
unions, S&Ls, and savings banks help encourage thriftiness by
paying interest to consumers who put their money in savings
deposits. Consequently, credit unions, S&Ls, and savings banks
are often referred to as (12) ....
3. the Federal Reserve System |
c. a savings bank or savings and loan association |
4. mutual savings bank |
d. a system by which people with a common bond -membership of the same club, church, association or trade union - can collaborate to put their savings into a joint fund |
5. credit union |
e. a bank that provides many different services for its customers and acts as a profit-making company |
6. thrift institution |
f. a bank owned and administered by the government as in some European countries, or a bank chartered by the US government |
7. charter |
g. a written instrument granting certain rights and privileges |
8. the Federal Deposit Insurance Corporation |
h. in the USA, thrift institutions which have no stockholders but are owned by the depositors |
9. savings and loan association |
i. a US federal agency that charters, regulates, and supervises all national banks and the federal branches and agencies of foreign banks in the United States |
10. the Office of the Controller of the Currency |
g. a financial institution that specializes in accepting savings deposits and making mortgage and other loans |
11. finance company |
k. a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities |
12. mutual fund |
1. a non-bank lender. It does not receive deposits, but makes loans to individuals or businesses |