Banking — page 3 of 5

Banking terms

201. investment adviser Any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of…
202. investment adviser agent An investment adviser agent includes any individual employed, appointed or authorized by an investment adviser 1) to solicit business on a compensated…
203. issuer Issuer means any person who issues or proposes to issue any security. Corporations, for example, may issue stock to the public, limited partnerships may…
204. Joint Account An account owned by two or more persons. Either party can conduct transactions separately or together as set forth in the deposit account contract.
205. Kiting Writing a check in an amount that will overdraw the account but making up the deficiency by depositing another check on another bank.
206. Large entity Any entity with gross receipts greater than $10 million during the year the reportable transaction occurs or in the preceding taxable year.
207. Late Charge The fee charged for delinquent payment on an installment loan, usually expressed as a percentage of the loan balance or payment.
208. Lease A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent).
209. Legacy Assets ​The Legacy Assets are a portfolio of debt securities held by the Asset Management Estates (AMEs) of failed corporate credit unions.
210. Lender An individual or financial institution that lends money with the expectation that the money will be returned with interest.
211. Letter of Wishes A letter of wishes is a document that purportedly has no legal status. In fact the document is used to transmit the wishes of the creator or the alleged…
212. Lien Legal claim against a property. Once the property is sold, the lien holder is then paid the amount that is owed.
213. limited branch Limited branch means any office at a fixed location of a Connecticut bank at which banking business is conducted other than the main office, branch or…
214. limited purpose trust company A limited purpose trust company engages only in fiduciary services. It does not accept deposits, and funds are not insured by the FDIC.
215. Line of Credit A pre-approved loan authorization with a specific borrowing limit based on creditworthiness.
216. liquidation The process through which the assets backing a defaulted loan are sold for cash.
217. Listed transaction A reportable transaction that is the same as, or substantially similar to, a transaction specifically identified by the IRS or FTB as a tax avoidance…
218. Loan Contract The written agreement between a borrower and a lender in which the terms and conditions of the loan are set.
219. Loan Fee A fee charged by a lender to make a loan (in addition to the interest charged to the borrower).
220. Loan Modification Provision A contractual agreement in a loan that allows the borrower or lender to permanently change one or more of the terms of the original contract.
221. Loan Proceeds The net amount of funds that a lending institution disburses under the terms of a loan, and which the borrower then owes.
222. Loan-to-Value (LTV) (LTV) ​The ratio of the outstanding principal amount of a mortgage loan to the appraised value of the mortgaged property.
223. Loan-to-Value Ratio (LTV) (LTV) The ratio of the loan principal (amount borrowed) to the appraised value (selling price).
224. Local Check A check payable by, at, or through a bank in the same check processing region as the location of the branch of the depository bank.
225. Loss Severity The percentage of realized losses incurred on a loan balance subsequent to liquidation.
226. Manufactured (Mobile) Home A structure, built on a permanent chassis, transported to a site in one or more sections, and affixed to a permanent foundation.
227. Market Price ​The price at which a security trades (i.e. could be purchased or sold) in the secondary market.
228. Material Advisor Any person who: Provides any material aid, assistance, or advice with respect to organizing, managing, promoting, selling, implementing, insuring, or…
229. Maturity The date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable.
230. Maturity Date ​The date as of which the principal of and interest on a security become due and payable.
231. Media Any organization in the business of informing the public with news or commentary.
232. member Member means any person who has been admitted to membership in the Connecticut credit union in accordance with state law.
233. merchant banking Merchant banking is a form of fee-based banking where the bank arranges credit financing, but does not hold the loans in its investment portfolio to…
234. Minimum Balance The amount of money required to be on deposit in an account to qualify the depositor for special services or to waive a service charge.
235. Minimum Payment The minimum dollar amount that must be paid each month on a loan, line of credit, or other debt.
236. Missing Payment A payment that has been made but not credited to the appropriate account.
237. mobile branch Mobile branch means any office of a Connecticut bank at which banking business is conducted which is in fact moved or transported to one or more…
238. Mobile home To be eligible for coverage under the National Flood Insurance Program, a mobile home must be on a permanent foundation and meet specific anchoring…
239. money forwarder [transmitter] and issuer of money orders and travelers checks No person shall engage in the business of issuing Connecticut instruments, or engage in the business of receiving money for transmitting the same, without…
240. Money Market Deposit Account A savings account that offers a higher rate of interest in exchange for larger than normal deposits.
241. Money Market Fund An open-ended mutual fund that invests in short-term debts and monetary instruments such as Treasury bills and pays money market rates of interest.
242. Mortgage A debt instrument used in a real estate transaction where the property is the collateral for the loan.
243. Mortgage Broker A mortgage broker means a person who, for a fee, commission or other valuable consideration, directly or indirectly, negotiates, solicits, arranges…
244. mortgage correspondent lender A mortgage correspondent lender means a person engaged in the business of making mortgage loans in such person's own name where the loans are not held by…
245. Mortgage Lender A mortgage lender means a person engaged in the business of making mortgage loans in such person's own name utilizing such person's own funds or by…
246. Mortgage Loan A loan made by a lender to a borrower for the financing of real property.
247. mortgage loan originator A mortgage loan originator means an individual who is employed or retained by, or otherwise acts on behalf of, a mortgage lender, mortgage correspondent…
248. Mortgage-Backed Security (MBS) (MBS) ​A mortgage‐backed security (MBS) is an asset‐backed security or debt obligation that represents a claim on the cash flows from mortgage loans, most…
249. Mortgagee The lender in a mortgage loan relationship.
250. Mortgagor The borrower in a mortgage loan relationship. (Property is used as collateral to make payment.)
251. Mutual Fund A fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities, or money market…
252. National Bank A bank that is subject to the supervision of the Comptroller of the Currency. The Office of the Comptroller of the Currency is a bureau of the U.S.
253. National Bank Examiner An employee of the Comptroller of the Currency whose function is to examine national banks periodically to determine the financial position of a bank and…
254. National Credit Union Administration (NCUA) (NCUA) The Federal regulatory agency that charters and supervises Federal credit unions.
255. National Flood Insurance Program (NFIP) (NFIP) The program of flood insurance coverage and floodplain management administered under the Flood Disaster Protection Act (FDPA or Act) and applicable…
256. Negotiable Order of Withdrawal Account (NOW) (NOW) A savings account from which withdrawals can be made by negotiable orders of withdrawal (functional equivalent of checks).
257. Nominee A nominee is an individual or entity, which acts on behalf of a beneficial owner.
258. Nominee Director Every IBC must have a Board of Directors. The Board may consist of one person or many people.
259. Noneconomic substance transaction Means the disallowance of any loss, deduction or credit, or addition to income attributable to a determination that the transaction or arrangement lacks…
260. Not Automatically Protected There are several types of Federal benefits that are not automatically protected under 31CFR 212: Federal benefits received by check rather than direct…
261. Official Check A check drawn on a bank and signed by an authorized bank official. (Also known as a cashier's check.)
262. Offset, Right of Banks' legal right to seize funds that a guarantor or debtor may have on deposit to cover a loan in default. It is also known as right of setoff.
263. Offshore This term, when used in this context, and when referring to a country, means a jurisdiction that offers financial secrecy laws in an effort to attract…
264. Offshore financial arrangement (OFA) (OFA) Any transaction designed to avoid or evade California income or franchise tax through the use of: (a) offshore payment cards, including credit, debit, or…
265. Offshore Mail Forwarding Address Often an IBC's offshore address is nothing more than a mail drop (P.O. Box) assigned to the IBC.
266. Offshore Promoter An offshore promoter is a person or entity who markets offshore arrangements to the public.
267. Offshore Trustee A trustee has a fiduciary duty to manage and conserve the assets of a trust over which he or she has control.
268. Online Banking A service that allows an account holder to obtain account information and manage certain banking transactions through a personal computer via the…
269. Open-End Credit A credit agreement (typically a credit card) that allows a customer to borrow against a preapproved credit line when purchasing goods and services.
270. Operating Subsidiary National banks conduct some of their banking activities through companies called operating subsidiaries.
271. Organizer Any person who discovers, creates, investigates, or initiates the tax shelter investment, devises the business or financial plans for the investment or…
272. Outstanding Check A check written by a depositor that has not yet been presented for payment to or paid by the depositor's bank.
273. Overcollateralization ​The amount, if any, by which the aggregate outstanding principal balance of collateral exceeds the aggregate outstanding principal balance of the…
274. Overdraft When the amount of money withdrawn from a bank account is greater than the amount actually available in the account, the excess is known as an overdraft…
275. Overdraw To write a check for an amount that exceeds the amount on deposit in the account.
276. Overlimit An open-end credit account in which the assigned dollar limit has been exceeded.
277. Par (Face) Value The dollar value of a security stated by the issuer and the total amount to be repaid to the investor as principal.
278. Parity Payment Part of the NCUA's guarantee obligation on the NGNs that represents the excess of the unpaid Note Principal Balance (after related payments have been…
279. Participating Community A community for which the Federal Emergency Management Agency (FEMA) has authorized the sale of flood insurance under the National Flood Insurance Program…
280. Passbook A book in ledger form in which are recorded all deposits, withdrawals, and earnings of a customer's savings account.
281. Past Due Item Any note or other time instrument of indebtedness that has not been paid on the due date.
282. Payday Loans A small-dollar, short-term loan that a borrower promises to repay out of their next paycheck or deposit of funds.
283. Payee The person or organization to whom a check, draft, or note is made payable.
284. Paying (Payor) Bank A bank upon which a check is drawn and that pays a check or other draft.
285. Payment Due Date The date on which a loan or installment payment is due. It is set by a financial institution.
286. Payoff The complete repayment of a loan, including principal, interest, and any other amounts due.
287. Payoff Statement A formal statement prepared when a loan payoff is contemplated. It shows the current status of the loan account, all sums due, and the daily rate of…
288. Payor The person or organization who pays.
289. Periodic Rate The interest rate described in relation to a specific amount of time. The monthly periodic rate, for example, is the cost of credit per month; the daily…
290. Periodic Statement The billing summary produced and mailed at specified intervals, usually monthly.
291. Personal Identification Number (PIN) (PIN) Generally a four-character number or word, the PIN is the secret code given to credit or debit cardholders enabling them to access their accounts.
292. Personal Investment Corporation (PIC) A PIC is a term used in the banking industry to refer to an IBC. PICs are generally created for the private bank's client in order to hold the client's…
293. PITI Common acronym for principal, interest, taxes, and insurance—used when describing the monthly charges on a mortgage.
294. Point of Sale (POS) (POS) 1) The location at which a transaction takes place. 2) Systems that allow bank customers to effect transfers of funds from their deposit accounts and…
295. Potentially abusive tax shelter Any tax shelter required to be registered under prior federal law or is a reportable transaction under present federal law or state law.
296. Power of Attorney A written instrument which authorizes one person to act as another's agent or attorney.
297. Pre-payment The payment of a debt before it actually becomes due.
298. Preauthorized Electronic Fund Transfers An EFT authorized in advance to recur at substantially regular intervals.
299. Preauthorized Payment A system established by a written agreement under which a financial institution is authorized by the customer to debit the customer's account in order to…
300. Preferred Risk Policy (PRP) (PRP) A policy that offers fixed combinations of building/contents coverage or contents-only coverage at modest, fixed premiums.