The Last Word: Ch 10 Review due next Tuesday; quiz next Tuesday

Chapter 10, Section 2 Economics

 There are three main types of financial institutions in the US Today:  Commercial banks  Savings and Loans  Credit Unions

 Initially established to provide loans to businesses.  **The Banking Act of 1933 created a distinction between commercial and investment banks, but deregulation in the 1980s and 90s did away with that distinction. ▪ Deregulation also led to a wave of mergers, reducing the number of banks from 12,000 in 1990 to 7,500 in  The Federal Deposit Insurance Company (FDIC - established in 1933 to insure banks) insures all commercial banks based in the US.

 How much banks are required to keep “in reserve”;  Set by the Federal Reserve Board (more later)

 Savings and Loans  They began in the 1830s as a way for people to pool their savings in a safe place to earn interest and a source of financing for families who wanted to buy homes.

 Cooperative savings and lending institutions that offer services similar to commercial banks, such as savings and checking accounts.  But most credit unions specialize in mortgages and auto loans.  **Most credit unions have deposit insurance through the NCUA, and organization similar to the FDIC.  The major difference between credit unions and other institutions is that credit unions have membership requirements.  To become a member, a person must work for a particular company, belong to a particular organization, or be a part of a particular community affiliated with the credit unions.

Members of the US Navy Employees of Ford Members of Unions Teachers in Spokane, WA

 Banks provide 3 main services:  Customers can store money in accounts or store valuables in safe deposit boxes.  Customers can earn money by earning interest on accounts or making investments through the bank.  Customers can borrow money using a home mortgage, auto loan, credit card, etc.