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Financial Fitness Program

Financial Fitness Program. Banks and Other Financial Institutions. Key Points. Banking Industry Regulators Types of Financial Institutions What do Banks Offer Bank Products and Services Electronic Banking Services Checking Accounts Check 21. United States Banking Regulators.

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Financial Fitness Program

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  1. Financial Fitness Program Banks and Other Financial Institutions

  2. Key Points • Banking Industry Regulators • Types of Financial Institutions • What do Banks Offer • Bank Products and Services • Electronic Banking Services • Checking Accounts • Check 21

  3. United States Banking Regulators • Federal Deposit Insurance Corporation • (FDIC) • Office of Thrift and Supervision • (OTS) • Office of the Comptroller of the Currency • (OCC) • Federal Reserve • (FRB) • National Credit Union Administration • (NCUA) • Securities and Exchange Commission • (SEC)

  4. Types of Financial Institutions • Commercial Banks • State Banks • Savings and Loan Associations • Mortgage Banks and Mortgage Companies • Credit Unions • Sales Finance Companies • Financial Services Companies • Internet Banks

  5. What Do Banks Offer ? • Stable and safe place to keep your money • Insurance Protection • All Accounts are Federally Insured up to $100,000 • Various Loan Services and Products • Financial Services and Products

  6. Checking Accounts Saving Accounts Money Market and Certificate of Deposit Accounts Credit Cards Loans Money Orders, Cashiers and Traveler’s Checks ATMs Brokerage Services Estate Planning Insurance Products Wire Transfers and International Remittance Services Electronic Banking Services Mainstream Bank Products and Services

  7. Electronic Banking Services • Direct Deposit • Cyber banking (Bill Payer, Brokerage, etc.) • Automatic Payments • Automatic Teller Machines • Point-Of-Sale Transactions

  8. National Go Direct Campaign? What is Go Direct? A Great Savings Tool! • Go Direct is a national campaign designed to motivate more Americans to select direct deposit for their Social Security, Supplemental Security Income (SSI) and other federal benefit payments. • U.S. Department of the Treasury and the Federal Reserve Banks are sponsoring the campaign

  9. Should Taxpayers Care About Direct Deposit? • Yes. The Treasury issues more than 150 million benefit checks annually. If all those were converted to direct deposit, it would save taxpayers about $120 million annually. Almost all the money saved remains in the Social Security Trust Fund.

  10. Why is Direct Deposit a Good Idea? • Direct deposit is safer than mailing checks. (Prevents Fraud) • When there's a problem with a Social Security payment, nine times out of 10 it's with a paper check, not a direct deposit payment. • It's easier than checks, because people who get benefits don't need to go to the bank or credit union to deposit a check. • Their payment goes straight into their account on payment day each month, giving people more control over their money. • Direct Deposit allows immediate access to funds from virtually anywhere. • Call the Go Direct toll-free helpline at (800) 333-1795, or enroll online. You also can sign up at a bank, credit union, or local Social Security office.

  11. Types of Fringe Banking Services • Payday Lenders • Check Cashers • Pawn Shops • Car Title Loans • Rent to Own Stores • Rapid Refund Tax Loans • Rapid Anticipation Refund Loans (RAL) • Finance Companies • Sub Prime and Predatory Lenders

  12. How Banks Make Money • Fees for services • Earned interest on loans • Earned interest on investments

  13. Typical Bank Fees • Monthly service fee • Per check fee • Check printing fee • ATM-use fee • Overdraft fee • Credit Card fee's)

  14. Items Needed to Open a Bank Account • Funds • Proper Identification • Social Security number • Signature

  15. Choosing a Checking Account • Location • Fees • Other charges • Interest • Restrictions • Special features

  16. Items on a Check • Name and address • Check number • Routing numbers • Account number • Bank name and branch

  17. How Checks are PaidThe Old Fashion Way Sue writes check to hotel Hotel’s bank credits its account Hotel deposits check into local account Check is routed through Federal Reserve System to Sue’s bank Fed electronically transfers money and credits hotel’s bank Bank verifies check

  18. Modern Check Clearing Process • A new federal law known as the “Check 21 Act” makes it easier for banks to create and send electronic images of paper checks. • Under Check 21, any bank may create a special paper copy — called a “substitute check” — using images of the front and back of an original check. • If any bank in the process requires a paper check, another bank can send a substitute check in place of the original.

  19. How Does Check 21 Effect You? • Because of Check 21 and other check-system improvements, your checks may be processed faster • Money may be deducted from your checking account faster and in some cases instantly. • There may be no float time • Before you write a check, make sure that your checking account has enough money in it to cover the check. • It works both ways…funds from a check given to you also reach your accounts faster

  20. Reg (CC) Check Clearing TimesCheck Deposits and Availability of Funds

  21. Tips for Using ATMs • Know what ATM Networks your financial institution (s) are affiliated with • Use institution specific ATM Networks to reduce fees • Keep your ATM Card and Pin Number in a safe place • If stolen, report loss immediately • Record all transactions and fees in check register to avoid overdraft fees i.e. (Courtesy Pay) • Combine ATM usage • Plan ahead and withdraw sufficient cash to avoid multiple trips to the ATM everyday

  22. Tips for Using ATMs • Keep ATM card in a safe place • If stolen, report loss immediately • Record all transactions and fees in check register • Avoid high ATM surcharges

  23. Identity Theft What is Identity Theft ? • It occurs when one person’s identification (which can include name, social security number, or any account number) is used or transferred by another person for unlawful activities.

  24. Why Must You Protect Yourself ? • Identity thieves may change "your" address on an account so that you won't ever receive the bills with the fraudulent charges on them. • They will often pay the minimum balances on accounts they have opened, so as to avoid calling attention to the account and having it cut off. • Identity theft often goes undetected. Within a month of being committed, half of the crimes still remain unnoticed. • One in ten stays hidden for two or more years. • They may even use the identities of children or persons who are deceased, so that the crime is less likely to be noticed. • It could cost you time, money, your reputation, and even your credit rating

  25. Ways to Protect Yourself • Destroy anything with an account number on it . • Anything with an account number on it can be used in identity theft. • Be particularly wary of giving out your social security number. • Never over the phone as a rule • Take Immediate Action • If you are a victim. Notify all creditors and others • Check your credit Report Periodically • Correct any errors or omissions immediately • Put an alert on your credit report

  26. Tips for Cutting Bank Costs • Rule number 1: Have good credit and high credit scores • Shop around for an institution that provides all of the services and convenience you need as a customer. • Understand the fee structure at all institutions • Understand the cost of all loans • Seek higher savings rates and lower loan rates for all products as a consumer.

  27. Tips for Cutting Bank Costs • Bank at a credit union if you qualify • Use a smaller community bank • Explore no-frills checking options • Link checking account with other accounts • Combined balanceswork in your favor • Avoid accounts that require high balances and that add charges if that requirement is not kept • Pay your bank obligations on time

  28. Tips on Using the Banking System“An Educated Consumer is Our Best Customer” • Have the Proper Identification • Bank at an Institution that is Customer and Consumer Friendly • Don’t be Afraid to Ask Questions • Know the Different Types of Institutions • Learn Banking Terminology • Don’t be Intimidated By the Building • Understand Your Needs and Your Rights • Read Everything

  29. Conclusion • All consumers, including those located in disadvantaged communities, want financial services and products that are affordable, accessible, and focused on their needs. 

  30. Conclusion • The costs for transactional and short-term credit products from nontraditional financial sources are not affordable for low-income consumers and in many cases exacerbate their economic distress. 

  31. Conclusion • Your challenge as a Financial Fitness Educator is to advocate for more conventional financial services in those neighborhoods

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