Banks

In common parlance the term “bank” refers to many types of financial institutions. In addition to a bank, the term can refer to a trust company, a savings bank, savings and loan institution, credit union, thrift, thrift and loan, or trust company

There is a wide variety of banking institutions. The differences among these financial institutions is the result of both history and politics. Some banks may be regulated and supervised by different federal and/or state agencies. While these institutions may appear quite similar, they actually have different rights, powers, and obligations; they may even have different tax obligations. Savings and loan associations must invest more of their assets in home mortgages than traditional banks. Trust companies manage and administer trust funds of individuals and pension plans but may not take deposits into checking or savings accounts. Credit unions enjoy certain tax advantages. Some banking institutions have special deposit insurance arrangements. Some financial institutions can sell other financial services or products—like insurance—and other financial institutions may not. And some financial institutions must put significant cash reserves on deposit with the federal government, whereas others do not.

Banks that are chartered by the Comptroller of the Currency are called “National banks.” National banks usually bear the words “national” or “national association” in their titles; sometimes they carry the letters N. A. or N. S. & T. in their titles.


Inside Banks