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ABA American Bankers Association - A trade association for banks and savings associations.
Abandonment Giving up ownership. Leaving a deposit account without any deposits or withdrawals for a long period of time, as though it has been forgotten. Can lead to the account's being surrendered to state authorities.
Absolute Gift A gift with no conditions or "strings" attached.
Absolute Title A legal document that shows a person or entity has total ownership of real estate or other property.
Accelerated Depreciation A method of depreciation that includes larger deductions in the earlier years of an asset's life.
Acceleration In lending, it's the act of speeding up the maturity of a loan. It makes all of the loan balance, plus interest, due immediately, instead of over a regular payment schedule. Acceleration may be allowed by the terms of a loan if the borrower is in default by failing to make payments on time or to adhere to other terms of the loan contract.
Access In a bank's safe deposit area, access is the legal right to open a safe deposit box, and to add or remove property.
Accommodation Endorsement An endorsement on a check by a bank customer put there only to get the bank to cash the check for someone else, usually a non-customer. The endorser making the accommodation doesn't benefit from the check or otherwise use it, but agrees to pay for the check if it bounces.
Accord and Satisfaction Substitution of one agreement for another, usually by two parties who are in a dispute under the first agreement. In some cases, it's what happens after one of the parties asks, "What will it take to make this problem go away?"
Account A deposit in a customer's name that can be withdrawn, such as a checking account, savings account, or certificate of deposit account. Also used to refer to loan accounts (credit card account, mortgage loan account, etc.)
Account Activity The transactions on an account. Includes:  previous balance, payments or deposits, other credits, new credit extended or withdrawals, finance charges (loan accounts), late charges (loan accounts), and new balance.
Account Analysis A review of the balances and activity in a deposit account (usually a business account), to determine the profitability of that account to the bank.
Account History The history of an account over a specified period of time, including (for credit card accounts) the number of times the account was past due or over limit.
ACH A network designed to exchange and deliver electronic transactions for banks and their depositors. The ACH network handles, for example, direct deposited government payments and commercial payrolls, as well as automated charges from businesses.
ADA Americans With Disabilities Act - a law to prevent discrimination against individuals with disabilities.
Administrator/Administratrix The person appointed by a court to handle the estate of someone who died without a will, or an estate that has no executor. (A female administrator is referred to as an Administratrix.)
Affidavit A written statement or declaration made under oath (or affirmed) before a notary public or other officer authorized to administer oaths.
AGI Adjusted Gross Income - The amount after adjustments on which individual income taxes are based.
AICPA American Institute of Certified Public Accountants - This group helps set standards used by accountants in presenting financial statements of organizations.
ALM Asset/Liability Management - a committee within a financial institution which oversees management of the assets and liabilities of the institution. Also the process overseen by that group, designed to balance the institution's earnings, growth and stability.
Altered Check A check or draft which has been modified from the original payment terms (for example, an unauthorized change to the payee or the dollar amount).
Annual Percentage Rate The Annual Percentage Rate expresses the cost of credit as an annual rate. The APR includes both the interest and other fees paid (finance charges) that would not come into play in a cash transaction.
Annual Percentage Yield The rate of return on an interest-bearing deposit account, expressed as an annual rate. The APY shows the effect of compound interest.
APR See Annual Percentage Rate
APY See Annual Percentage Yield.
ARM Adjustable Rate Mortgage - A mortgage loan on which the interest rate can vary.
ATM Automatic Teller Machine - a machine that dispenses money from an accountholder's deposit account. Some ATMs also allow bill payments, funds transfers, stamp purchases, balance inquiries, etc.
Authorized Signer A person listed on a deposit account who has the ability to transact business but does not have ownership of the funds in the account.
Auto Debit An automatic transfer, such as from a deposit account to a loan. Usually made on a recurring schedule.
Available Balance The part of a customer's account balance that is available for immediate withdrawals. It may be less that the full balance in an account if checks have recently been deposited to the account.
Bad Debt Recovery The collection of funds on an account which a bank charged off earlier.
Balance Due The balance on a loan or credit card account after adding interest and subtracting payments and other credits.
Balance of Account The amount that remains in a customer account, or the amount that remains due from a customer on a loan account.
Balloon Payment A large payment that is due at the end of a loan. A balloon payment can be caused by setting up installment payments that aren't big enough to pay off the loan in the period allowed. For example, a loan might be due in five years, with payments based on a 30-year schedule. That will leave a large principal balance due at the end of the fifth year.
Bank Examiner The individual who performs a bank examination on behalf of a government regulator. Bank examiners help regulators maintain the safety and soundness of the banking system.
Bank Identification A series of digits used to identify a particular bank.
Bank Statement A record of a customer's account that is issued at regular intervals, showing all transactions during the period covered. Sometimes called checking account statements or savings statements.
Bankrupt Being unable to meet scheduled financial obligations. Special court proceedings may be used to set up and control plans to repay debts of a bankrupt person or business.
Beneficiary A person or entity (such as a charity) who will receive assets or profits from an estate, a trust, an insurance policy or other financial contract that provides for a distribution. Also includes a person named to receive ownership of property that is designated with a "transfer on death" (stocks and bonds) or "payable on death" (deposit accounts) legend.
BIF Bank Insurance Fund - the predecessor of the FDIC's current Deposit Insurance Fund. The BIF insured commercial banks and certain mutual savings banks.
BSA Bank Secrecy Act - a law intended to detect/report/deter criminal, money laundering and terrorist financing activities in the financial system.
Bureau Consumer Financial Protection Bureau. Also known as the "CFPB." An independent Federal government agency created by Congress to protect consumers by carrying out Federal consumer financial laws. The Bureau is responsible for issuing regulations that implement most Federal consumer protection statutes, and has enforcement authority over "major players" in the industries that provide or offer consumer financial services.
Cable Transfer/Payments The instruction to effect a payment or transfer which is transmitted by telecommunication.
Call Date A date when the issuer of a bond or other obligation may "call" for redemption of all or part of the debt issue. In other words, the bond may be paid off early, ending interest payments that an investor might have planned on.
Cancellation Voiding of a document after its purpose has been completed ("canceled checks"). Calling off a transaction, such as a loan transaction involving a consumer's home (see Right of Rescission).
Capacity The ability to pay a debt.
Capital The money invested in a business by the owners to operate the business. An owner's original investment plus any profit reinvested in the business. When reviewing a credit application, the funds an applicant has available to meet downpayment and closing costs.
Cash out refinance A mortgage loan transaction in which property is refinanced for more than what is currently owed, with the owner taking back the extra cash for various purposes.
Cashier An officer of a bank.
CBA Controlled Business Arrangement - an arrangement in which a bank or other provider of real estate settlement services refers business to a related business. For example, an attorney who owns a title company refers clients to the title company. Under the Real Estate Settlement Procedures Act (RESPA) a disclosure of this kind of arragement is required. This discloses the affiliation, an estimated charge for the services to be provided, and a notice that the consumer is not required to use that provider and is free to shop around.
CCPA Consumer Credit Protection Act - An overall title for a group of laws designed to protect consumers in their use of credit (and other services). It includes the Truth in Lending, Equal Credit Opportunity, Electronic Fund Transfer, Fair Debt Collection Practices and several other Acts.
CD see Certificate of Deposit
CEO Chief Executive Officer. Often (but not always) the president of a bank or company.
CERCLA Comprehensive Environment Response, Compensation, and Liability Act - commonly known as Superfund, this law created a tax on the chemical and petroleum industries and provided broad Federal authority to respond directly to releases or threatened releases of hazardous substances that may endanger public health or the environment. Many real estate appraisals must consider CERCLA implications such as land with underground storage tanks.
Certificate of Deposit A savings account which is paid interest and is penalized if withdrawn prior to an agreed upon maturity date. Also called a "time deposit."
Certification A formal attestation of a matter of fact (such as a certification of a vote that a business's board of directors authorized officers of the company to borrow money or open deposit accounts, etc. Also, an action of a bank that "accepts" a check drawn on that bank, which means that the bank promises to pay the check at a later time if there is no alteration made to the face of the check. The check is then said to be "certified."
CFO Chief Financial Officer
CFPB Consumer Financial Protection Bureau. Also known as the "Bureau." An independent Federal government agency created by Congress to protect consumers by carrying out Federal consumer financial laws. The CFPB is responsible for issuing regulations that implement most Federal consumer protection statutes, and has enforcement authority over "major players" in the industries that provide or offer consumer financial services.
CFR Code of Federal Regulations - The arrangement of federal regulations in an orderly manner by topic or agency. For example, regulations dealing with banking matters are generally found in Title 12 of the Code of Federal Regulations.
Charge Back Transaction which the cardholder bank returns either to its own merchant or to the merchant bank because the transaction fails to meet certain established criteria.
CHARM Consumer Handbook on Adjustable Rate Mortgages - a booklet distributed to consumers applying for an Adjustable Rate Mortgage loan, explaining the terms and definitions of the product.
Check A negotiable financial instrument that directs a bank (the drawee or paying bank) to pay a stated amount of money to a specific person (the payee), from a designated account of the bank's depositor (the drawer of the check). The right to receive the money can be transferred by negotiation to other persons (transferees).
Checking Account A bank account from which withdrawals may be made at any time, usually without prior notice, often through the use of checks. Checking accounts that don't earn interest are sometimes called demand deposit accounts. Checking accounts that do earn interest are often referred to as NOW (Negoatiable Order of Withdrawal) accounts.
Closing Costs Expenses related to the transfer and financing of real estate. Can include land fees, title fees, and appraisal fees, among others.
CO Compliance Officer - a bank officer assigned to help banks in consumer compliance matters.
Collateral Property (stocks, bonds, deposit accounts, vehicles, real estate, etc.) pledged to secure the payment of a loan.
Collusion Cooperation of two or more individuals in a fraudulent scheme.
Community Property Ownership in property dictated by state laws based on marital status. There are nine community property state in the U.S. -- Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.
Compound interest The adding of interest to a sum of money (the principal) so that the next calculation of interest is based on the increased principal balance. When repeated, the result is a larger total interest amount than provided by simple interest at the same rate.
Contingent Beneficiaries Persons or entities (such as charities) designated to receive a distribution of property if the primary beneficiary(ies) of a financial contract, will, trust, etc., die before the event triggering the distribution.
Contingent/Convenience Signer A contingent or convenience signer is someone on the account, with access to the funds, but without ownership in the account.
Co-signer A person who agrees to pay another person's debts if the primary borrower fails to do so.
CPI Consumer Price Index - represents prices paid by consumers for a representative basket of goods and services
CRA Community Reinvestment Act - a law requiring financial institutions to make loans in the areas where they receive deposits from, and encourages investment in community development.
Credit card A device, usually a plastic card with a magnetic strip or embedded computer chip, that can be used to purchase goods or services on credit. The card may be proprietary (issued by a business for use exclusively for purchases from that business), or general-purpose (capable of being used at other businesses that accept the card). Balances on the underlying credit account may be due in full each billing period, or repayable on a revolving basis (extended terms).
Credit Report A report of information on a consumer's debt and payment history.
CTR Currency Transaction Report - a form financial institutions are required to complete when large cash transactions are made, under the Bank Secrecy Act.
Custodial Account An account held by a custodian, often under the Uniform Gifts/Transfers to Minors Act (UGMA or UTMA). The custodian manages property owned by a minor in such cases.
Custodian A financial institution that has the legal responsibility for a customer's securities. This implies management as well as safekeeping. Also, an individual to whom property has been transferred, to managed on behalf of a minor, who is the true owner (see Custodial Account, above).
DBA (sometimes appears as d/b/a) - Doing Business As - Using an assumed (fictitious) name for business operations. The business may be owned by a sole proprietorship or by an entity. Examples include a sole proprietor named James Smith DBA Smitty's Billiards Parlor and the corporation Doctors Associates, Inc., DBA Subway (sandwich shops).
DDA Demand Deposit Account - a traditional checking account that does not earn interest.
Debit A charge (increase) on a customer's credit card account or deduction from a bank deposit account.
Deed of Trust A written document used in some states to secure a mortgage loan. Also see "Mortgage."
Demise Death
Dependent A person who is dependent for support upon another. Often used in connection with loan applications or tax returns.
Deposit An addition to a deposit account (opposite of withdrawal).
Deposit Account Agreement The contract under which a customer has a deposit account with a financial institution.
Deputy When used in connection with a safe deposit box, this term refers to a person specifically appointed by the lessee(s) to have access to the box as the agent of the lessee(s).
Direct Deposit The process of having one's income deposited directly into a deposit account.
Donee One who receives a gift.
Down Payment The amount of cash paid toward the selling price to reduce the amount financed and establish equity.
Draw To withdraw or remove from (an account). When a check is "drawn" on a bank account, the check designates the bank and the account from which funds are to be withdrawn to pay the check.
Dwelling Unit Living quarters designed to be occupied by one household.
E or EE Bond One type of debt instrument issued by the United States government to the general public. The bonds are available in small denominations and are purchased at a discount to earn interest at a prescribed rate. Also called a "savings bond."
ECOA See Equal Credit Opportunity Act
Economic Activity The production and distribution of goods and services.
EEOC Equal Employment Opportunity Commission - The agency of the United States Government that enforces the federal employment discrimination laws.
EFAA Expedited Funds Availability Act (implemented by banking Regulation CC). It requires financial institutions to make deposits available within specific time frames, based on the location of the bank of deposit and where deposited checks are drawn.
EFT(A) Electronic Fund Transfer Act - implemented by banking Regulation E. This is a consumer protection law which establishes the basic rights, liabilities, and responsibilities of consumers and financial institutions that use/offer electronic transfers of money. The objective of the act and regulation is the protection of consumers using electronic fund transfers such as direct deposits and transactions with ATM/debit cards.
EHL Equal Housing Lender - a designation meaning a lender intends to comply with fair housing laws.
EIN Employer Identification Number - a tax reporting number assigned by the Internal Revenue Service. It's assigned to businesses, estates, trusts and other taxpayers or employers. Sometimes an "F" for "federal" is added to the front, FEIN. Generally this is an unnecessary distinction.
Embezzlement Misuse or theft of property placed in one's care.
Encoding The magnetized recording of data on the magnetic stripe on a bank card. Also the process of printing account and dollar amount information on the bottom of checks to allow for automated processing.
Endorsement This is the signing of a check by the holder so that it may be transferred to another party. Some endorsements are restrictive such as "For Deposit Only" or special such as "Pay to the Order of," where the transferee is named.
EPA Environmental Protection Agency - has oversight of CERCLA (see above)
Equal Credit Opportunity Act This law is implemented by banking Regulation B. The Act prohibits specific types of discrimination in lending. It's part of the Consumer Credit Protection Act.
Escrow Funds deposited into an account from which withdrawals will be made for the payment of taxes, insurance or other authorized expenses on the real estate securing a loan. Also, money, property, a deed or a bond placed in the custody of a third party for delivery to a recipient only when the recipient has fulfilled specified conditions.
Estate The nature and extent of an owner's rights with respect to land or other property. Commonly used to refer to property of a deceased person.
Ethics The application of moral principals to conduct. Often used in the phrase "Code of Ethics," which refers to a summary of a business's or firm's statement of its principals and list of types of unwanted or prohibited behavior.
Executor/Executrix A person, appointed by a testator (the person who signs a will) to execute the testator's will. (A woman is an executrix.)
Extension of Credit The granting of credit (a loan) in any form.
Facsimile A copy of a signature or document by a duplicating process, especially a "fax machine."
FACTA See the Fair and Accurate Credit Transactions Act
Fair and Accurate Credit Transactions Act This law amended the Fair Credit Reporting Act (see below), adding additional consumer rights and protections pertaining to credit reports and identity theft.
Fair Credit Reporting Act This law imposes requirements on reporters and users of credit bureau reports to safeguard the information of consumers, report correct information and investigate and correct errors in a timely manner.
Fair Debt Collection Practices Act The FDCPA establishes rules debt collectors must follow such as when and how often they may contact a debtor. Part of the Consumer Credit Protection Act.
FCRA See the Fair Credit Reporting Act
FDCPA See the Fair Debt Collection Practices Act
FDIC Federal Deposit Insurance Corporation - the regulatory agency which oversees state-chartered non-member (of the Federal Reserve System) banks. The agency also administers the deposit insurance system covering most bank deposits in the U.S.
FDPA Flood Disaster Protection Act - requires lenders to verify the flood zone designations of certain improved real estate and housing related loans and to require flood insurance from borrowers under certain circumstances.
Federal Credit Union A cooperative association organized under the Federal Credit Union Act for accepting deposits from members and providing loans and other financial services with the proceeds.
Federal Reserve Board The federal regulatory agency which oversees state chartered banks that are members of the Federal Reserve System, their subsidiaries, and bank holding companies.
Fee A charge for a service.
FEMA Federal Emergency Management Agency - oversees the Flood Disaster Protection Act and emergency responses by the federal government.
FFIEC Federal Financial Institutions Examination Council - a cooperative entity that represents the federal banking regulatory agencies - the Office of the Comptroller of the Currency, Federal Reserve Board, Federal Deposit Insurance Corporation, Office of Thrift Supervision and the National Credit Union Administration. The FFIEC attempts to maintain agreement among its members on examination procedures by standardizing exam manuals and providing uniform training to bank and credit union examiners.
FHA Fair Housing Act; Federal Housing Authority; Federal Housing Administration - laws and the agency meant to regulate and investigate cases of housing discrimination.
FHBM Flood Hazard Boundary Map - topographic map depicting flood zones where insurance is mandatory and influencing flood insurance costs. These are produced by FEMA (see above).
FHLB Federal Home Loan Bank - a cooperatively owned bank for bankers that supports housing and economic development in the communities served by member institutions
FHLMC Federal Home Loan Mortgage Corporation - referred to as Freddie Mac, FHLMC is a corporation that buys mortgage loans from the financial institutions that originate them, and converts them into investments. This increases the supply of funds available for mortgage lending.
FHO Flood Hazard Officer - an officer level employee charged with ensuring compliance with flood laws and regulations.
FIA Freedom of Information Act - a law ensuring public access to U.S. government records
FIRM Flood Insurance Rate Map
FmHA Farmers Home Administration - An agency of the federal government that provides credit assistance to farmers and other individuals who live in rural areas.
FNMA Federal National Mortgage Association - Also referred to a Fannie Mae. The Federal government established Fannie Mae to expand the flow of mortgage money by creating a secondary market. Fannie Mae was authorized to buy Federal Housing Administration (FHA)-insured mortgages, thereby replenishing the supply of lendable money
Forecasting The act of estimating future events, particularly business operations.
Foreign Currency The money of another country.
Foreign Trade The exchange of goods between two or more nations.
Forgery The illegal production of something counterfeit, such as a signature, a check, or other document. Something that is counterfeit or forged.
FRB See Federal Reserve Board
FTC Federal Trade Commission
Full Payment Payment of an entire amount owned.
GAAP Generally Accepted Accounting Principles. A group of standards for the presentation of financial reports by businesses, including banks.
Gain A profit or increase in value.
General Property Taxes Taxes on real estate and personal property, usually at the local level.
GFE Good Faith Estimate - an estimate of costs provided on some mortgage loans allowing the borrower to determine what costs will be related to a loan transaction.
Glut An oversupply of some good in the marketplace. For example, "A glut of oil should result in lower gasoline prices."
GNMA Government National Mortgage Association - referred to as Ginnie Mae. GNMA is a government-owned corporation within the Department of Housing and Urban Development (HUD). Its operations add to the supply of money for mortgage lending.
Good Faith "Honesty in fact in the conduct of a transaction."
Government Bonds Debt securities issued by the United States government.
Governments An abbreviation frequently used in describing bonds issued by the federal government.
Grace Period A time span between the due date on a loan payment and when a late fee would be owed. The grace period allows for the mail to deliver the payment for processing. Also the period of time after automatic renewal of a certificate of deposit in which a depositor is allowed to cancel the renewal and withdraw funds without penalty.
Grantor The seller or giver of property or of a right. For example, the seller of real estate is the grantor of the deed.
Ground Lease An agreement for the rental of land on a long term basis. Sometimes called a land lease.
Guarantor A person who gives a Guaranty (see below).
Guaranty An agreement by one person (the guarantor) to assume another's responsibilies (for example, on a loan). Although the original borrower is responsible for the debt, the guarantor becomes liable if the original borrower fails to pay.
Guardianship Appointment of a person (a guardian) to be legally responsible for the care and management of an incompetent or a minor (the person) and/or that person's property. The position and responsibilities of a guardian.
Health Savings Account A deposit account into which payments may be made by an individual for the purpose of funding future health-related costs. The process benefits from certain tax benefits under current law.
Hedge A sale or purchase of a security designed to counter losses or gains from price or interest rate changes.
Heir A person who inherits real estate.
HELOC see Home Equity Line of Credit
HIC Hold in Custody. Refers to property, often investment securities.
HMDA Home Mortgage Disclosure Act - implemented by banking Regulation C - requires data collection and recordkeeping and reporting of certain mortgage loans to provide a public record of a lender's real estate lending performance.
Holographic Will A will entirely in the handwriting of the testator (person making the will).
Home Equity The value of property remaining after debts against it are deducted. For example, a home valued at $100,000 with an $80,000 mortgage has $20,000 of equity.
Home Equity Line of Credit A loan product secured by the equity in a borrower's home. Usually a line of credit "revolves" so the borrower may use and repay money until the loan is due in full.
Home Equity Loan A loan secured by the equity in the borrower's home. Generally "closed-end" (single borrowing and fixed time for repayment) in contrast with Home Equity Lines of Credit.
Home Improvement Loan A loan designated as being for the purpose of home improvement whether secured by a home or not.
Homestead The land and buildings occupied as a primary residence by the owner and his/her family, often protected by state laws from some forms of debt collection activity.
HUD The Department of Housing and Urban Development. It administers and implements government housing and urban development programs.
HUD-1 or -1(A) A real estate settlement statement itemizing buyers' and sellers' costs in certain mortgage transactions. The form is designed by HUD (see above) under the requirements of the Real Estate Settlement Procedures Act (RESPA).
IBAN See International Bank Account Number
Imports Goods and services that are bought abroad.
Impound To seize something and hold it in legal custody. Items impounded can be cash or other assets.
Incentives Something given to reward performance above a stated level, or to invite certain behavior (such as incentives given to new customers or new card buyers).
Income Bonds Bonds on which the payment of interest is not certain, but depends on sufficient earnings.
Income, Fixed A regular income that is not likely to change significantly.
Incorporate formation of a corporation.
Individual Retirement Account A deposit account into which contributions are made, usually with a tax benefit.
Insolvent Unable to pay what one owes when it is due.
Insufficient Funds Same as non-sufficient funds (NSF). A balance in a deposit account that isn't large enough to pay the checks and other items presented for payment.
Insurance A contract under which one party (the insured party) pays a fee (premium) and the other party (the insuror) agrees to pay an amount of money to the insured party in the event the insured party experiences a specific type of loss.
Insurance, Unemployment Insurance against loss of income due to being unemployed.
Inter Vivos Between living persons. This term is often used to designate a "living" trust; that is, a trust created during one's lifetime.
Interest-Bearing A deposit that earns interest such as a savings account, money market deposit account or a certificate of deposit.
Interest Rate A charge for borrowing money or paid into an interest bearing account, generally expressed as an annual rate such an an Annual Percentage Rate (loans) or an Annual Percentage Yield (deposits).
International Bank Account Number An international standard for identifying bank accounts across national borders. These are used in the European Union. United States banks do not generally participate in this standard.
Investor Someone who purchases an asset (such as securities or real estate) with the goal the the asset provide income and that the investment will not lose value. Also, a holder of a mortgage or a permanent lender for whom a mortgage banker services the loan.
IOLTA Interest on Lawyers' Trust Account - an interest-bearing checking account for funds held by an attorney in trust or escrow on behalf of third parties.
IRA See Individual Retirement Account
Irrevocable Trust A trust, often used in estate planning, that may not be rescinded or canceled.
IRS Internal Revenue Service - the U.S. government agency responsible for tax collection and tax law enforcement.
ITF In Trust For- used in the ownership designation of deposit accounts
Joint Account or Ownership Ownership of property by two or more persons. The owners are either joint tenants or tenants in common.
Joint Tenancy The holding of property by two or more persons so that, upon the death of one joint owner, the survivor or survivors become the owner(s); differs from tenancy in common and tenancy by the entirety.
Judgment An amount owed under a court order.
Judgment Debt A debt proven valid by a court.
Keogh Plan A retirement plan for self-employed persons and their employees. It provides for yearly tax deductible contributions up to a specified limit.
Kin Members of the same family.
Kindred Persons related by blood.
Last Will The will last executed by a person.
Laundered Money Funds that are moved in and out of accounts or through other forms of property to make their illegal source unrecognizable.
Lease A formal agreement under which property is temporarily used or occupied for a specified period in exchange for specified payments. The owner of the property is termed the lessor, the party obtaining temporary use of the property is the lessee.
Legal Charity One that meets the legal definition of that term.
Lessor The person, corporation, or other legal entity that leases property to a lessee.
Lienholder Someone holding a recorded security interest in property that was pledged as loan collateral.
Line of Credit This is a credit arrangement whereby a lender agrees to advance a specified amount of credit for a specific period of time. It may be referred to as an LOC. These are generally revolving lines meaning they may be borrowed and repaid and borrowed again during the term of the credit period. Credit cards and Home Equity Lines of Credit are examples although the term "LOC" is often indicitive of a commercial loan.
Living Trust An estate planning device created while you're alive that lets you control the distribution of your estate. You transfer ownership of your property and your assets into the trust. You can serve as the trustee or you can select a person or an institution to be the trustee. If you're the trustee, you will have to name a successor trustee to distribute the assets at your death.
Load The selling commission paid by the buyer of shares in open-end mutual investment funds.
Loan A business contract for the extension of credit by a lender to a borrower.
Loan Application Register A record of loan data collected under the Home Mortgage Disclosure Act or Community Reinvestment Act.
Loan to Value A ratio, expressed as a percentage arrived at by dividing the loan amount by the value of property. A loan of $80,000 secured by a home valued at $100,000 has an 80% LTV (80,000/100,000 = .8, or 80%).
LOC See Line of Credit
LOMA Letter of Map Amendment - applied for to FEMA if a property is classified as being in a special flood hazard area but is believed to be on a naturally high elevation which is above the 100-year flood plain.
LOMR Letter of Map Revision - applied for to FEMA if a property is classified as being in a special flood hazard area but is believed to be elevated out of the 100 year flood plain due to fill being brought to the site.
MAGI Modified Adjusted Gross Income
Mail Teller A bank employee responsible for processing mail deposits.
Manual, Policy A written statement of the overall principals used in managing the business of a bank. Often made up of several separate policies covering specific areas of operation.
Market Analysis Research done to measure and understand the characteristics of a given market.
Maturity The length of time until the principal amount of a bond must be repaid, a loan is due or a deposit account has reached the end of its term. Also refers to the specific date of those events.
Metropolitan Statistical Area A geographic area defined by the federal government.
MICR Magnetic Ink Character Recognition - a special type of ink which enables special characters printed in magnetic ink to be read and input rapidly to a computer
Minor A person under legal age, that is, under the age at which her or she is accorded full civil rights. In most cases, a person under 18 years old.
MMDA See Money Market Deposit Account.
Money Market Deposit Account A type of savings account that can be accessed with a legally limited numer of checks payable to third parties each month.
Mortgage A document used to give a security interest in property (usually real property) to a lender. The term is commonly used instead of "mortgage loan."
Mortgage Loan A loan secured by a mortgage or deed of trust on real property.
MSA See Metropolitan Statistical Area.
NACHA National Automated Clearing House Association (see ACH). The body responsible for coordinating the activities of the various automated clearinghouses in the U.S. NACHA establishes rules for the operation of the clearinghouses, and for participation in the system.
NASD National Association of Securities Dealers
National Bank A bank whose charter is approved by the Comptroller of the Currency. It hold a federal charter, and must belong to the Federal Reserve System and FDIC.
NBA National Bank Act
NCUA National Credit Union Administration - the federal regulatory agency which oversees credit unions
NCUSIF The National Credit Union Share Insurance Fund. Similar to the FDIC's Deposit Insurance Fund. Administered by the National Credit Union Administration (NCUA). Like the Deposit Insurance Fund, the NCUSIF is a federal insurance fund backed by the full faith and credit of the U.S. government. All federal credit unions and the majority of state credit unions are covered by NCUSIF.
Negotiable A term used to designate an instrument, ownership of which is transferable by delivery (and endorsement when required).
Negotiable Order of Withdrawal (NOW) Account A special savings account which has unlimited check writing capabilities but which has limited ownership by law. Individuals, sole proprietorships and some non-profit and government entities may own a NOW account.
Net Change The difference between the closing price of a security from one day to the next.
Net Worth The amount by which one's assets exceed one's liabilties. In other words, net worth is what one owns, less what one owes.
NFIP National Flood Insurance Program
Not-for-Profit Used to describe an organization created for other than commercial purposes or specifically not to produce profits.
NOW account See Negotiable Order of Withdrawal Account.
NSF Non Sufficient Funds - see insufficient funds
Obligation A duty to pay a sum of money when due, or to perform some act.
OCC See Office of the Comptroller of the Currency.
Occupancy Expense Expenses related to the use of property. Occupancy expenses include such items as rent, heat and upkeep.
OFAC This is an acronym that stands for Office of Foreign Assets Control, an entity within the U.S. Department of Treasury which administers and enforces economic sanctions to carry out U.S. policy regarding narcotics traffickers, terrorists, arms dealers, and certain countries that have policies the U.S. Government disagrees with. There are various sanctions programs and there is also a list of "Specially Designated Nationals" (aka the SDN list or OFAC list). If an individual or entity is on the OFAC list, his/its money or property must be frozen and reported to the U.S. government.
Office of Comptroller of the Currency The regulatory agency which oversees national banks.
OID Original Issue Discount. Used to describe an investment such as a Treasury Bill, at less than its face value. Income on the investment usually comes from the sale of the investment at face value at maturity.
Online Refers to a system that allows for current access to account status and transaction details, and the entry of tranfer and other instructions using computer terminals, often via the internet.
On-The-Spot Loan An extension of funds on a pre-approved credit line or credit card.
OREO See Other Real Estate Owned
OSHA Occupational Safety and Health Administration. This agency is charged with enforcement of laws involving the safety of workplaces.
Other Real Estate Owned Property owned by a financial institution gained through foreclosure.
OTS Office of Thrift Supervision - the regulatory agency which oversees savings/thrift institutions
Overdraft A negative balance in a deposit account.
Overdraft Line of Credit A loan product that transfers funds to an "attached" checking account that becomes overdrawn.
Overdraft Protection An agreement with a deposit holding financial institution to pay insufficient items in a checking account. The agreement may involve transfers from another deposit account of the customer, or from an ovedraft line of credit (see above). It may also simply involve an agreement to allow the customer's account to go overdrawn in order to pay the item, with the bank retaining the right to return (bounce) items at its discretion.
Paid Outside of Closing A classification given to expenses paid in certain real estate transactions that are paid at other than the closing
Passbook Account A savings account, the main balance record of which is kept in a consumer ledger consisting of pages on which transactions can be posted.
Partition Division of property (usually real estate) at the request of one of several co-owners of the property.
Pay To exchange cash or an official check for a check that is presented for payment. Also to provide credit for such a check without the right to revoke the payment.
Payable on Death A written declaration from a deposit customer (usually on the "signature card") that the funds will belong to one or more specifically named beneficiaries upon death of the owner.
Payee The party receiving funds.
Payer The party delivering funds.
Pendente Lite During the continuance of a suit at law or in equity.
Per Diem A daily rate. Often used to indicate the amount that a payoff amount will increase each day until the final payment is received.
Personal Identification Number (PIN) A code number used to access private information or use an ATM/debit/credit card for certain transactions.
Personal Representative A term often used to refer to the court-approved representative of a decedent's estate. An executor/trix or administrator/trix.
PIN See Personal Identification Number
PITI Abbreviation for Principal Interest Tax & Insurance, describing a mortgage payment which includes escrows for tax and insurance.
Plat A map representing a piece of land subdivided into lots with streets, boundaries, easements, and dimensions. It is usually included in the public record.
PMI See Private Mortgage Insurance.
POA See Power of Attorney
POC See Paid Outside of Closing
POD See Payable on Death
POS Point of Sale - a method of payment in which funds are electronically transferred, with an authorization from the purchaser given at the place the sale takes place.
Power of Attorney A legal document empowering one person (an agent or attorney-in-fact) to act on behalf of another (the principal).
Predeceases Dies before another individual. Often used to describe a situation in which a beneficiary (see above) of a will dies before the testator (person who wrote the will). If the beneficiary predeceases the testator, the will may provide for the substitution of a contingent beneficiary (see above).
Preferred Stock A class of capital stock that comes before common stock in its claim on the earnings of a corporation and upon the assets of the corporation in the event of liquidation. Preferred stock does not usually have voting rights. Dividends on preferred stock are often set at a predetermined rate.
Private Mortgage Insurance Insurance required by many lenders from homebuyers who borrow more than 80 percent of their home's value. This is insurance on the loan, not on the property.
Promissory Note A loan contract or promise to pay.
Provisional Credit Credit paid while a claim is pending, but which is not final. Provisional credit, for example, might be given if a consumer makes a claim of an error involving an electronic fund transfer, and the bank is unable to resolve the claim within ten business days.
PUPID Pay Upon Proper ID - a means of payment once the identification of the recipient is verified. Often used in connection with wired payment instructions benefiting persons who are not depositors of the bank receiving the instructions. This mode of payment (to non-customers) has fallen into disfavor.
Qualified Endorsement An endorsement on a check or other instrument containing the words "without recourse" or similar language intended to limit the endorsers liability.
Real EstateThe right, title or interest that a person has in real property, as distinguished from the property itself. The term is often used to describe real property, nonetheless.
Real Estate Settlement Procedures Act A law - implemented by HUD Regulation X - that requires disclosures and restricts the practices of settlement service providers such as lenders, real estate agents and others involved in mortgage lending.
Realtor A real estate broker or an associate who is a member of a local real estate board affiliated with the National Association of Realtors.
Redeem To collect the principal and interest on a certificate of deposit, bond, or other investment.
Refer to Maker A broad term used by banks when they have determined that a check cannot be paid, but that there may be sufficient funds on deposit. It often means the bank suspects fraud, but cannot confirm that at the time.
Registration Listing of the owners on a registered bond or certificate of stock.
Regulation O A banking regulation addressing insider transactions and activities
Release of Lien An instrument releasing secured property from a lien.
Resolution A formal document expressing the intention of a board of directors of a corporation or the governing body of other organizations.
RESPA See Real Estate Settlement Procedures Act.
Revocable Trust A trust which may be cancelled or changed by the grantor. Only after death of the grantor does ownership of assets transfer to named beneficiaries.
RFPA Right to Financial Privacy Act - a law intended to customers' confidential financial information from being released to federal government agencies without adherence to specific rules to allow the customer to protest such access.
Right of Rescission The ability to cancel a loan transaction on some types of home loans without a loss of money to the borrower.
SAIF Savings Association Insurance Fund - A predecessor to the FDIC's Deposit Insurance Fund. SAIF insured savings associations. Both BIF (see above) and SAIF were administered by the FDIC. The two funds were recently merged into the Deposit Insurance Fund (DIF), which covers all FDIC-insured institutions.
Salary Payment for services on a weekly or bi-weekly basis, at a fixed rate, regardless of hours worked. Contrasted with "wages," which are normally set on an hourly basis.
Sale The transfer of ownership of property from one person to another, for some agreed-upon consideration.
Salvage The attempt to get repayment of some of a loan obligation that has already been charged off on a bank's books.
SAR Suspicious Activity Report - a federally required document to be completed in certain circumstances which could indicate robbery, theft or illegal activity such as an internal theft, money laundering or terrorist financing.
Savings Account A deposit account in a financial institution which earns interest. It requires a 7-day advance notice of withdrawal in the deposit contract, (though this is rarely enforced).
Savings Bond A small-denomination bond issued by the U.S. government on which interest earned is free of federal tax.
SBA Small Business Administration
SCRA See the Servicemembers Civil Relief Act
Second Mortgage A real estate mortgage tbhat is junior to (comes behind in order of priority) another mortgage.
Secured Account An account against which collateral or other security is held.
SEP Simplified Employee Pension Plan. Allows employers to set aside money in retirement accounts for themselves and their employees. Under a SEP, an employer contributes directly to traditional individual retirement accounts (SEP-IRAs) for all employees, including the employer.
Servicemembers Civil Relief Act A law protecting financial and civil rights of servicemembers who enlist, are drafted or are called to active duty and certain others who serve their country.
Settlor A person who creates a trust by a written trust declaration, also called a "Trustor" or "Donor."
SFHA Special Flood Hazard Area - a geographic designation which identifies an area based on its likelihood of flooding
Short-term Loan Loan to a business for a term usually less than one year, normally for operating needs.
Simultaneous Death The death of two or more persons when the order cannot be proved. This can be important in dealing with wills and estate matters.
Skimming A term used when reading and recording magnetic stripe information from an ATM/debit card. Also a method of copying the encoding on a credit or debit card for fraudulent purposes such as creating unauthorized duplicates of the card. The "clone" cards are used to steal funds from the authorized cardholder and/or the issuing bank.
Skip Account A borrower with a balance owing who has moved, leaving no forwarding address.
SLMA Student Loan Marketing Association - also referred to as Sallie Mae, a student loan servicing group
Society for Worldwide Interbank Financial Telecommunication A messaging network often used for the completion of international funds transfers. Referred to as SWIFT.
Sole Proprietorship An unincorporated business with a single owner. Some states may recognize a husband and wife to be capable of holding a sole proprietorship.
Spam Unwanted/unrequested email offering commercial products or offers.
Spouse A husband or a wife.
State In most laws and regulations, the term refers to any state, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States.
Statutes of Descent Laws, rules or statutes governing the descent of real property under intestacy.
STD Servicing Transfer Disclosure - A required notice in the event the servicing of a residential mortgage loan is to be transferred. Mortgage lenders often sell or otherwise transfer the servicing of mortgage loans. To a consumer, this means that payments will have to be sent to a different party at a different address.
Student Loan Marketing Association Also referred to as Sallie Mae. A student laon servicing group
Successor Trustee A person who assumes the role of trustee under a trust agreement when the current trustee dies, resigns, is removed, or is otherwise unable to serve.
Surety Bond An agreement from a bonding or insurance company to guarantee a person's performance.
SWIFT See Society for Worldwide Interbank Financial Telecommunication
Tax Lien A claim against property for non-payment of federal or state taxes. It can prevent the sale or transfer of the property without a release from the taxing authority.
Teller A bank employee who handles customer deposits and withdrawals, among other duties.
Tenancy by the Entirety A form of joint ownership of real property, investment accounts and deposit accounts (in some states) that is available only to married couples. Transfers of property held in this form normally require that both spouses sign.
Testamentary Trust A trust created through specific instructions in a person's Will.
TILA See Truth in Lending Act.
Time Deposit A savings deposit intended to be held in a financial institution for a designated period, such as with a one-year certificate of deposit. A time deposit is subject to an early withdrawal penalty.
TIN Taxpayer Identification Number - An identification number used for the processing of taxes. For individuals, it is usually the individual's Social Security Number. For businesses, it is usually an Employer Identification Number.
TISA See Truth in Savings Act.
Totten Trust A deposit account designated by its owner to be held "in trust for" a named beneficiary. The designation is completely revocable, and the funds remain the property of the account owner until the owner's death. If the "in trust for" designation remains at the owner's death, the account operates much like a "payable on death" account: it becomes payable to the named beneficiary without becoming part of the decedent's estate.
Transfer A change in ownership.
Trust Property held by one party for the benefit of another.
Trust Account An account otherwise called a Totten trust. Also, an account held by a trust.
Trust Agreement A formal agreement establishing a trust.
Trust Indenture A form of trust agreement agreed to by the trustee (the party holding property on behalf of another person) and by the beneficiary (the persons on whose behalf the property is held). This term often applies to an arrangement in which the trustee holds a mortgage or other security on behalf of investors who purchase a corporation's bonds.
Trustee One who holds property as a fiduciary on behalf of another person.
Trustor The creator of a trust. Also referred to as a "Settlor" or "Donor."
Truth in Lending Act A consumer protection law - implemented by banking Regulation Z - requiring among other things loan disclosures which allow a consumer to compare loan terms and costs.
Truth in Savings Act This is a law implemented by Regulation DD which provides consumers with information on deposit accounts. It requires certain disclosures by a financial institution and allows a consumer to comparison shop deposit accounts based on fees and interest rates.
UCC Uniform Commercial Code - a set of laws established at the state level regulating commerce. These laws are proposed by a national group of state-appointed commissioners, but are adopted, with some state-specific adaptations, by the individual states.
UCC-1 Uniform Commercial Code form used to record a security interest in the collateral described on it.
Uniform Transfers to Minors Act State laws adapted from a national model under which property can be transferred to an adult (called a custodian) to be managed on behalf of a minor who is its lawful owner. These laws require the custodian to use the property for the minor, and to release the property to the minor when he or she reaches the age specified in the law (ranges from 18 to 21). Transfers made under these laws are final.
USA PATRIOT Act Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001 (Public Law 107-66) This law was enacted shortly after 9-11-2001 as a response to enhance law enforcement powers and the ability of the U.S. Government to combat terrorism.
USC United States Code - a section of federal law
USPAP Uniform Standards of Professional Appraisal Practice. A set of rules followed by professional real estate appraisers. Federal rules require that banks use appraisals performed under USPAP standards in most circumstances.
Usury Limits Maximum rates of interest, as set by individual state laws.
UTMA Account A deposit account of a custodian under the Uniform Transfers to Minors Act (see above).
VA Department of Veterans Affairs (formerly, Veterans Administration) - a department of the U.S. government representing veterans that also guarantees a portion of eligible veterans' mortgage loans.
Withdrawal Removal of funds from an account.