Nonbank Banks
Barron's Business Dictionary:
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Nonbank Banks
An institution that provides most of the services of a bank but is not a member of the federal reserve system and does not have a charter from a state banking agency. A nonbank bank may offer credit cards, consumer and commercial loans, savings accounts, and accounts with services similar to bank checking accounts. By avoiding government regulation, such businesses may be able to be more innovative and profitable than traditional government-regulated banks.
| Nonacquiescence, Nominee, Nominalwage | |
| Nonbusiness Income, Noncallable, Noncompetitive Bid |
Investopedia Financial Dictionary:
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Nonbank Banks
Financial institutions that are not considered full-scale banks because they do not offer both lending and depositing services. Nonbank banks can engage in credit card operations or other lending services, provided they do not also accept deposits.
The Bank Holding Company Act of 1956 prohibits nonbank companies from owning banks as subsidiaries, but they may own other nonbank banks.
Investopedia Says:
Many nonbank banks that allow deposits are insured by the FDIC and reserve requirement restrictions will apply to these institutions. Nonbank banking has expanded greatly in recent years, as non-financial institutions such as retail companies and auto makers have entered the lending business.
Because many companies try to stretch the rules on banking rights, the U.S. government has massively restricted new chartering of nonbank banks since the late 1980s.
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Barron's Business Dictionary
Dictionary of Business Terms. Copyright © 2007 by Barron's Educational Series, Inc. All rights reserved.
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