Financial Institutions
by Stephanie Foy
| 6 Questions
Note from the author:
GSE SSEF2 a and b
Katherine wishes to find a financial institution that will allow her to earn interest on deposits and use a debit card. Which of the following would represent her best choices?
A credit union or a payday lender
A bank or a title pawn lender
A title pawn lender or a payday lender
A bank or a credit union
What are the cost and benefit of borrowing from payday lenders?
The fees are cheap to pay back, but it takes a long time to receive the funds
The interest rates are low compared to other lenders, but most people won’t qualify
The loans are fast and require no credit check, but have high interest rates and fees.
The credit checks are difficult to pass, but the loans are long term.
Look at the options below. Select ALL statements that are true about credit unions.
Credit unions must serve a defined segment of the population.
Credit unions only offer small payday loans.
Credit unions are owned and run by their members.
Credit unions offer checking and savings accounts, as well as loans.
Credit unions can serve anyone.
Credit unions are owned by stockholders and run by a board of directors.
Financial institutions such as banks and credit unions channel funds from savers to
the Board of Directors.
the government.
the Federal Reserve.
What type of financial institution offers a variety of services to the general public?
Title Pawn Lenders
Credit Unions
Payday Lenders
Which sentence BEST describes a title pawn lender?
They require lengthy credit checks for a fixed long term loan.
They lend money on the equity accrued on one’s home value
They serve communities without access to traditional banking services.
They are designed to be quick and convenient while continuing the use of one’s vehicle.
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