Federal government regulations concerning banks and banks are codified in Title 12 of the Code of Federal Regulations. Banks are just one of many types of financial institutions that offer financial services to their customers. The term “bank” is often used as a collective term to describe one of the many forms of financial institutions. Banks, like most other banking-type financial institutions, are established by statutes. A charter is the official authorization of a regulatory body (such as a state) to accept deposits and/or provide financial services. The articles of association specify the powers and duties of a bank. State and federal governments strictly regulate banks and bank accounts. Customer accounts may be created by both national and state financial institutions, all governed by the law under which they are established. Congress has passed numerous criminal laws relating to crimes against banks and banking institutions.
Some crimes are related to acts of violence such as robbery, while others focus on non-violent crimes such as money laundering. Each of the crimes listed below is listed in Title 18 of the United States Code. Many federal agencies enact regulations relevant to banks and banks, including the Federal Deposit Insurance Corporation, the Federal Reserve Board, the General Accounting Office, the National Credit Union Administration, and the Treasury Department. Congress created the Federal Deposit Insurance Corporation in 1933, which is funded by premiums paid by member institutions. If a customer maintains an account with an FDIC member bank, the customer`s accounts are insured for a total of $100,000. Banks that are member institutions must post prominent signs indicating that the bank is a member of the FDIC or a sign stating “$100,000 Deposits – Backed by the Full Confidence and Creditworthiness of the U.S. Government.” This is true for many banks that are licensed either federally or by state law. Each Federal Home Loan Bank must at all times have at least an amount equal to the current deposits of its members invested in (1) U.S. bonds, (2) deposits with banks or trusts, (3) advances with a term not exceeding five years, paid to members on such terms and conditions as the Director may require, and (4) advances with a term not exceeding five years made to members whose debts of creditors (other than advances from the Federal Home Loan Bank) do not exceed 5 per cent of their net assets and that may be made without the security of residential mortgages or other security on such terms and conditions as may be prescribed by the Director. read interpretive letters that address legal, banking and enforcement decisions, CRA issues, and business applications. The FDIC regularly publishes updates on news and activities. Stay up-to-date on FDIC announcements, read speeches and testimonials on the latest banking issues, learn about policy changes for banks, and follow upcoming conferences and events.
Not all banks or financial institutions have automated banking machines. In front of ATMs, banks employed cashiers to help their customers manage all banking transactions. Since ATMs can inexpensively perform many of the functions that were previously performed by cashiers, ATMs have replaced many of the bank`s cashiers. There is no law requiring banks or other financial institutions to have ATMs. Instead, it`s a business decision for any bank to have one. ATMs offer distinct advantages over traditional cashiers in terms of location and hours of operation. ATMs are relatively small and can be placed where banks would not normally open branches (gas stations, hotel lobbies, airports). In addition, ATMs are open when banks are closed; ATMs can operate twenty-four hours a day, seven days a week. National banks and federal savings banks are among the most regulated institutions in the country, with numerous laws and regulations governing their activities.
Federal credit unions are not-for-profit cooperative financial institutions owned and operated by their members. Credit unions are democratically controlled, and their members have the opportunity to vote on important matters affecting the operation of the credit union. For example, the board of directors that operates a credit union is elected by its members. Credit unions provide an alternative to banks and credit associations as “safe places” where savings and loans can be placed at reasonable interest rates. Credit unions pool their members` funds to lend to each other. If there is a change, it is that banks are more nervous about lending funds and more determined in their own due diligence. Also, at least in the books, there is emerging reform and better oversight, although that is another question of whether this becomes a reality. One aspect of the recent collapse of the banking sector that has been notable has been the lack of understanding of its relatively new role in our economy and its recent tendency to engage in the kind of risky lending and hedge fund investments that are not associated with the staid banking world. Another aspect that quickly became apparent as the public learned more about banks was their complicated and complex methodology of charging for various services that were previously free. Few people read the fine print on the monthly statement or loan documents of the credit card company, but the simple fact is that the various banks are making massive profits by taking advantage of the tendency of businesses and the general public to ignore the powerful and expensive methods that banks have used to become powerful and effective forces in the economy. Jimmy Stewart of the local bank has been replaced by giants who do risky business internationally, charge for services that are often incomprehensible to the business community, and ask taxpayers for help when things go wrong. The purpose of this article is to briefly describe Basic Law: Interaction with Banks and their obligations under state and federal regulations.
As it used to be said about people of the opposite sex, “You can`t live with them and you can`t live without them.” Any business looking for success is likely to need a good relationship with a bank, and to achieve this, one must familiarize yourself with the applicable laws. A customer`s bank is required to know each customer`s signature. If another party forges the customer`s signature, the customer is generally not responsible for the amount of the check. However, if a company is located in California and the company`s employee forges a signature, the bank is generally not liable because the employee is an agent of the drawer. However, if the infringer is not a representative, banks can recover from the counterfeiter, but generally not from the innocent customer or a third party who gave money or other valuables in exchange for the check in good faith and without notice of the counterfeit. Editors have the right to check all cheques debited from their accounts to ensure that there has been no counterfeiting. Drawers also have the right to stop paying cheques that have not been paid or certified by their banks. This is done by a stop payment order that the customer issues to the bank. If a bank pays a cheque despite stopping payment, it is liable to the customer for the value of the cheque. A person who opens an account with a bank can place an order written on that account in the form of a check.
The account holder is called the drawer, while the person named on the cheque is called the beneficiary. If the subscriber asks the bank to pay the person named in the cheque, the bank is obliged to do so and reduce the subscriber`s account by the amount indicated on the cheque. A bank is generally not required to cash a cheque from anyone other than a depositor.
