Banking — page 4 of 5

Banking terms

301. Prepayment The payment of a debt before it actually becomes due.
302. Prepayment Clause A clause in a mortgage allowing the mortgagor to pay off part or all of the unpaid debt before it becomes due.
303. Prepayment Penalty A penalty imposed on a borrower for repaying the loan before its due date. (In the case of a mortgage, this applies when there is not a prepayment clause…
304. Previous Balance The cardholder's account balance as of the previous billing statement.
305. Prime Loans Loans typically extended to the most credit-worthy borrowers that generally carry a lower interest rate compared to other types of loans.
306. Principal Balance The outstanding balance on a loan, excluding interest and fees.
307. Principal Balance​ The amount owed on a debt.
308. Principal, Interest, Taxes, and Insurance (PITI) (PITI) Common acronym for principal, interest, taxes, and insurance—used when describing the monthly charges on a mortgage.
309. Private Banking Offshore banking services are most commonly handled by the private banking departments of commercial banks or by private banks that cater solely to…
310. Private Mortgage Insurance (PMI) (PMI) Insurance offered by a private insurance company that protects the bank against loss on a defaulted mortgage up to the limit of the policy (usually 20 to…
311. Promoter Any person who, directly or indirectly, organizes or assists in the organization of a tax shelter or who participates in the sale of any interests in a…
312. Real Estate Settlement Procedures Act (RESPA) (RESPA) Federal law that, among other things, requires lenders to provide "good faith" estimates of settlement costs and make other disclosures regarding the…
313. Reconciliation The process of analyzing two related records and, if differences exist between them, finding the cause and bringing the two records into agreement.
314. Red Cross Scheme This is a scheme that uses a charitable entity to disguise a transfer of funds offshore. For example, $1,000,000 is donated to a charitable organization.
315. Redlining The alleged practice of certain lending institutions of not making mortgage, home improvement, and small business loans in certain neighborhoods-usually…
316. Refinancing A way of obtaining a better interest rate, lower monthly payments, or borrow cash on the equity in a property that has built up on a loan.
317. Refund An amount paid back because of an overpayment or because of the return of an item previously sold.
318. registration by coordination A state procedure for registering securities for which a registration statement has been filed with the Securities and Exchange Commission (the "SEC")…
319. registration by qualification A state procedure for registering securities for which a registration statement has not been filed with the SEC.
320. Regular Program Community A community wherein a Flood Insurance Rate Map is in effect and full limits of coverage are available under the Flood Disaster Protection Act (FDPA or…
321. regulation a Regulation A is an exemption from federal securities registration. Regulation A permits an issuer to raise a limited dollar amount in an offering of…
322. Regulation D Regulation D is an exemption from federal securities registration for private placements of securities.
323. Release of Lien To free a piece of real estate from a mortgage.
324. Renewal A form of extending an unpaid loan in which the borrower's remaining unpaid loan balance is carried over (renewed) into a new loan at the beginning of the…
325. Reportable transaction Any transaction the IRS or FTB determines as having a potential for tax avoidance or evasion.
326. representative office Foreign banks often open representative offices as a first step in establishing a presence in America.
327. Residential Mortgage-Backed Securities (RMBS) (RMBS) ​A type of Mortgage-Backed Security backed by residential mortgage loans.
328. Residual Interest Interest that continues to accrue on your credit card balance from the statement cycle date until the bank receives your payment.
329. Return Item A negotiable instrument—principally a check—that has been sent to one bank for collection and payment and is returned unpaid by the sending bank.
330. Reverse Mortgage A reverse mortgage is a special home loan product that allows a homeowner aged 62 or older the ability to access the equity that has accumulated in their…
331. Revolving Credit A credit agreement (typically a credit card) that allows a customer to borrow against a preapproved credit line when purchasing goods and services.
332. Right of Offset 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 the right of set-off.
333. Right of Rescission Right to cancel, within three business days, a contract that uses the home of a person as collateral, except in the case of a first mortgage loan.
334. Safe (or Safety) Deposit Box A type of safe usually located in groups inside a bank vault and rented to customers for their use in storing valuable items.
335. Safekeeping A service provided by banks where securities and valuables are protected in the vaults of the bank for customers.
336. sales finance company A sales finance company is any person or entity that engages in Connecticut in the business, in whole or in part, of acquiring retail instalment contracts…
337. Satisfaction of Mortgage A document issued by a mortgagee (the lender) when a mortgage is paid in full.
338. savings and loan association Connecticut law allows the formation of a savings and loan association in either mutual or capital stock form.
339. savings bank Savings banks were initially formed in the early 1800's in the northeastern United States to promote thrift among wage earners.
340. secondary mortgage loan A secondary mortgage loan means (A) a loan or an extension of credit, including, but not limited to, an extension of credit pursuant to a contract or an…
341. Security The term "security" covers a broad variety of financial instruments, including stock, promissory notes, bonds, debentures, limited partnership interests…
342. Seller For purposes of the list maintenance requirement, a seller is: Any organizer, underwriter, broker, or dealer (or other similar person) who transfers any…
343. Service Charge A charge assessed by a depository institution for processing transactions and maintaining accounts.
344. service mark Not every business opportunity must be registered with the Department of Banking under the Connecticut Business Opportunity Investment Act.
345. share Share means the basic unit of capital of a Connecticut credit union. Members may receive dividends based on the number of shares held.
346. Signature Card A card signed by each depositor and customer of a bank which may be used as a means of identification.
347. small corporate offering registration (scor) (see registration by qualification) The Small Corporate Offering Registration ("SCOR") is designed for United States based corporations that offer securities in reliance on the exemption…
348. small loan company A small loan company is any person or entity that engages in the business of making loans of money or credit in the amount or to the value of five…
349. Special Flood Hazard Area (SFHA) (SFHA) An area defined on a Flood Insurance Rate Map with an associated risk of flooding.
350. Stale-Dated Check Presented to the paying bank 180 days (6 months) or more after the original issue date.
351. State Bank A bank that is organized under the laws of a State and chartered by that State to conduct the business of banking.
352. State Banking Department The organization in each State that supervises the operations and affairs of State banks.
353. Statement A summary of all transactions that occurred over the preceding month and could be associated with a deposit account or a credit card account.
354. Stop Payment An order not to pay a check that has been issued but not yet cashed. If requested soon enough, the check will not be debited from the payer's account.
355. Student Loan Loans made, insured, or guaranteed under any program authorized by the Higher Education Act. Loan funds are used by the borrower for education purposes.
356. Substitute check A substitute check is a paper copy of the front and back of the original check.
357. Tax Benefit Includes deductions, exclusions from gross income, nonrecognition of gain, tax credits, adjustments (or the absence of adjustments) to the basis of…
358. Tax Haven A tax haven is a country, which provides a no-tax or low-tax environment. The U.S. is considered a tax haven by some countries.
359. Tax Shelter Is a partnership or other entity, any investment plan or arrangement, or any other plan or arrangement, if a significant purpose of the partnership…
360. Terms The period of time and the interest rate arranged between creditor and debtor to repay a loan.
361. Time Certificate of Deposit A time deposit evidenced by a negotiable or nonnegotiable instrument specifying an amount and maturity.
362. Time deposit A time deposit (also known as a term deposit) is a money deposit at a bank that cannot be withdrawn for a certain "term" or period of time.
363. trademark See service mark.
364. transaction Includes any series of related steps carried out as part of a prearranged plan.
365. Trust account A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies.
366. Trust Administrator A person or institution that manages trust accounts.
367. Truth in Lending Act (TILA) (TILA) The Truth in Lending Act is a Federal law that requires lenders to provide standardized information so that borrowers can compare loan terms.
368. Uncollected Funds A portion of a deposit balance that has not yet been collected by the depository bank.
369. Uniform Commercial Code (UCC) (UCC) A set of statutes enacted by the various States to provide consistency among the States' commercial laws.
370. Uniform Gift to Minors Account A UGMA provides a child under the age of 18 (a minor) with a way to own investments.
371. uninsured bank An uninsured bank does not accept retail deposits and need not apply for federal deposit insurance.
372. Usury Charging an illegally high interest rate on a loan.
373. Usury Rates The maximum rate of interest lenders may charge borrowers. The usury rate is generally set by State law.
374. Variable Rate Any interest rate or dividend that changes on a periodic basis.
375. Weighted Average Coupon ​The weighted average of the stated interest rates on the underlying loans, weighted by the principal balances of the loans.
376. wholesale banking Banking services offered to large corporate and institutional customers, such as pension funds and government agencies are considered wholesale banking.
377. Wire Transfer A transfer of funds from one point to another by wire or network such the Federal Reserve Wire Network (also known as FedWire).
378. ​90 Days Delinquent The percentage of loans underlying a Security that are 90 to 180 days behind on their scheduled payments.
379. ​Asset Management Estate (AME) (AME) Estate that holds the assets of a failed institution. Commonly administered by NCUA's Asset Management and Assistance Center, to which the NCUA Board has…
380. ​Asset-Backed Security (ABS) (ABS) A security whose value and payments are derived from and collateralized (or backed) by the expected cash flows of pools of income-generating assets.
381. ​Atl-A Loans Loans extended to borrowers who have a high credit quality but whose characteristics fall outside the margins of Conforming Loan guidelines, such as…
382. ​Collateral Properties or assets that are offered to secure a loan and become subject to seizure upon default.
383. ​Medium Term Note (MTN) (MTN) ​Notes issued in the capital markets in late 2009 by US Central Federal Credit Union and Western Corporate Federal Credit Union.
384. ​Non-Agency RMBS ​A type of Mortgage-Backed Security issued by an entity other than a government sponsored enterprise (Fannie Mae / Freddie Mac) that does not have a…
385. ​Principal Paydown ​Portion of payment applied to principal balance.
386. ​Put Option A contractual provision conferring the right, but not the obligation, to sell an asset back to a counterparty (in the case of a security, the original…
387. ​Temporary Corporate Credit Union Stabilization Fund (Stabilization Fund) ​A borrowing facility and assessment authority, authorized under the 2009 Helping Families Save Their Homes Act, to allow the NCUA Board the ability to…
388. ​Underlying Security (-ies) Securities underlying the NGNs (i.e. Legacy Assets) that produce the cash flows used to pay off the NGNs.
389. ​​Foreclosure The legal proceedings initiated by a creditor to repossess the collateral for a loan that is in default, usually with the intent to liquidate the seized…
390. ​​Home Price Appreciation (HPA) (HPA) ​The rate by which house prices increase (or decrease) for a specified area, usually quoted on an annual basis.
391. ​​Investment Grade ​A security with a rating of BBB- or above.
392. ​​Note Principal Balance (Unpaid) ​The initial Note Principal Balance (also known as Par) of a given security on the closing date less all principal payments made on the security…
393. ​​Prepayment Speed ​The annualized rate at which borrowers pay off their loans ahead of schedule. Also referred to Constant Prepayment Rate, or CPR.
394. ​​Real Estate Owned (REO) (REO) The ownership of collateral property by the lender - usually a bank - after an unsuccessful sale at a foreclosure auction.
395. ​​Realized Loss A loss recognized when assets are sold for a price less than the outstanding principal balance of the asset plus interest and liquidation expenses.
396. ​​Securitization The process through which financial assets are pooled, transferred to a trust or other Special Purpose Entity (SPE), and issued and sold to investors in…
397. ​​Security (-ies) A general term for stocks, bonds, options, subscription rights, warrants and other tradable investments that confer a right to income or ownership.
398. ​​Subprime Loans ​Loans extended to borrowers who do not qualify for the best market interest rates due to a deficient credit history and/or a low credit score.
399. ​​Tranche One of several related securities issued in a Securitization transaction. Tranches in the same transaction may have different maturity, subordination and…
400. ​​Underlying Loans ​Loans underlying a security that produce the cash flows used to pay off that security.