Deck 8: Savings Associations and Credit Unions

Question 1

___________________ was created to provide a flexible source of credit to institutions that provide home mortgages and also served as the primary regulator of savings association up to 1970's.

A) Federal Savings and Loan Insurance Corporation
B) Federal Home Loan Bank Board
C) Federal Reserve Bank System
D) Office of Thrift Supervision

Answer 1

Federal Home Loan Bank Board

Question 2

Mutual savings banks or mutual savings associations

A) are owned and operated by common stockholders with a mutual bond.
B) are mutually operated by the stockholders and depositors.
C) are owned and controlled by the depositors and sometimes by the borrowers.
D) are the prevalent forms of savings and loans associations today.

Answer 2

are owned and controlled by the depositors and sometimes by the borrowers.

Question 3

A loan to purchase single and multiple residential housing, land, or other real structures, with the structure or land serving as collateral is called __.

A) mutual ownership
B) mortgage bonds
C) mutual funds
D) mortgage

Answer 3

mortgage

Question 4

Depository institutions set up to help finance the constructions and purchase of homes located primarily in the East Coast are called ___

A) credit unions
B) East Coast savings banks
C) savings banks
D) savings and loans

Question 5

_______________________are depository institutions established for the purpose of pooling the savings of local residents to finance constructions and purchased of homes and located throughout the country.

A) credit unions
B) mutual funds
C) savings banks
D) savings and loans

Question 6

______________ is the federal agency that regulates the S&L industry today.

A) Office of Thrift Supervision
B) Federal Deposit Insurance Corporation
C) Federal Home Loan Bank Board
D) Resolution Trust Corporation

Question 7

_______________________are cooperative. non-profit. member-owned depository institutions operated for the benefit of the members and borrowers who share a common bond.

A) credit cooperatives
B) credit unions
C) mutual associations
D) savings and loans associations

Question 8

A federal agency created to charter and regulate credit unions

A) National Credit Union Association
B) Credit Union National Association
C) Central Liquidity Facility
D) Office of Thrift Supervision

Question 9

Offered by savings associations since 1980. This type of deposit allows for check writing and earns interest

A) share certificates
B) Negotiable Order of Withdrawal
C) money market deposit account
D) share accounts

Question 10

The act that phased out many of the regulations enacted during depression including the Regulation Q and usury ceilings.

A) Resolution Trust Corporation 1989
B) Financial Institutions Reform, Recovery, and Enforcement Act of 1989
C) Depository Institutions Deregulation and Monetary Control Act of 1980
D) Garn-ST. Germain Depository Institutions Act of 1982

Question 11

Today, __ __________________provides insurance for savings association's deposits.

A) Federal Savings and Loans Insurance Corporation
B) National Credit Union Share Insurance Fund
C) Savings Association Insurance Fund
D) Federal Deposit Insurance Corporation

Question 12

This is then largest credit union association that provides services to its members such as automated payment services, credit card programs and bulk purchases of supplies.

A) Credit Union National Association
B) National Credit Union Share Insurance Fund
C) U.S. Central Credit Union
D) National Credit Union Association

Question 13

A lender-of-last resort created in 1978 for credit unions experiencing temporary liquidity problems.

A) U.S. Central Credit Unions
B) Central Liquidity Facility
C) National Credit Union Share Insurance Fund
D) National Credit Union Association

Question 14

Thrifts institutions would include the following except:

A) savings and loans
B) savings banks
C) credit unions
D) commercial banks

Question 15

When a credit union needs to raise cash quickly, it can turn to the

A) National Credit Union Association
B) Central Credit Facility
C) National Credit Union Share Insurance Fund
D) Savings Association Insurance Fund

Question 16

Which of the following is true?

A) One of the primary contributors for the problems experienced by the savings associations in the early 1980s was the nature of their business, borrowing short-term and lending long-term.
B) The expanded powers provided to the savings and 'loans by the Garm St. Germain Act of 1982 saved the industry from collapsed.
C) By law, members of a credit union must be employed by the same employer.
D) Credit unions tend to have higher interest rate risk compared to savings and loans.

Question 17

Which of the following is false?

A) Fifty one largest savings institutions control over $3 billion in assets of the insured savings institutions in the U.S.
B) Although insured savings institutions are becoming larger in asset size, the number have declined by more than 50% from 1984 to 2000.
C) Savings associations have more than double in nominal size since 1980s.
D) Like savings and loans, credit unions are tax-free non-profit organizations.

Question 18

The _________ was the primary federal regulatory agency for savings associations from 1932 to 1989.

A) the Office of Thrift Supervision
B) the Fed
C) the Federal Home Loan Bank Board
D) the Resolution Trust Corporation

Question 19

Financial claims with limited check writing privileges, offered by banks since 1982, that earn higher interest than fully checkable deposits and that require higher minimum balances are

A) money market mutual funds.
B) money market deposit accounts.
C) super NOW accounts.
D) demand deposits.

Question 20

Which of the following Acts bailed out the S&L industry in 1989?

A) The Garn-St. Germain Act
B) The Depository Institutions Deregulation and Monetary Control Act of 1980
C) The Financial Reform, Recovery, and Enforcement Act
D) The Resolution Trust Act

Question 21

Which of the following acts eliminated Regulation Q requirements.

A) The Garn-St. Germain Act
B) The Depository Institutions Deregulation and Monetary Control Act of 1980
C) The Financial Reform, Recovery, and Enforcement Act
D) The Resolution Trust Act

Question 22

Which of the following is false?

A) Savings banks may be mutually or stockholder owned.
B) Savings banks were created to help individual purchase homes.
C) Most savings banks are on the east coast.
D) Savings banks are no longer in existence.

Question 23

Which of the following is true?

A) The savings and loan crisis culminated with a taxpayer bailout in 1989 and reregulation of the industry.
B) Real interest rates were abnormally high in the 1970s and this contributed to the crisis.
C) Although the savings and loan crisis required taxpayer funds, in the end, all of the funds were paid back to the government when the assets of the failed thrifts were sold.
D) All of the above are true.

Question 24

Charles Keating was the head of

A) the Federal Home Loan Bank Board.
B) Lincoln Savings.
C) the Resolution Trust Corporation.
D) the Federal Savings and Loan Insurance Company.

Question 25

The Garn-St. Germain Act of 1982 did all of the following except

A) authorize Super Now Accounts.
B) authorize money market deposit accounts.
C) authorize money market mutual funds.
D) further deregulate savings and loans.

Question 26

The Depository Institutions Deregulation and Monetary Control Act of 1980 did all of the following except

A) phased out Regulation Q interest rate ceilings.
B) established uniform reserve requirements.
C) established universal reserve requirements for all depository institutions.
D) authorized money market deposit accounts.

Question 27

The agency created by FIRREA in 1989 to dispose of the properties of the failed thrifts was

A) the Resolution Trust Corporation.
B) the Office of Thrift Supervision.
C) the Savings Association Insurance Fund.
D) none of the above.

Question 28

The federal agency created in 1970 to charter and regulate federally chartered credit unions and state member institutions is

A) the Credit Union National Extension Board.
B) the National Credit Union Association.
C) the Credit Union National Association.
D) the Federal Deposit Insurance Corporation.

Question 29

Which of the following is true?

A) Credit unions are exempt from corporate taxes.
B) Credit unions are exempt from the Community Reinvestment Act.
C) Credit unions may have federal or state charters and are non-profits.
D) All of the above are true.

Question 30

Which of the following is false?

A) Credit unions do not face the same risks as other depositories because they do not have to earn a profit.
B) Deposits in credit unions are never insured.
C) There is a Credit Lending Facility that lends credit unions that need to raise funds quickly.
D) Credit unions may be federally or state chartered.

Question 31

The primary overseer of the savings and loan industry today is the

A) Federal Home Loan Bank.
B) Federal Reserve.
C) Office of Thrift Supervision.
D) Resolution Trust Corporation.

Question 32

Savings association can manage interest rate risk by

A) more careful screening of loan applicants.
B) the use of adjustable rate mortgages.
C) Short term borrowings in the eurodollar market.
D) Only issuing insured deposits.

Question 33

Savings association can manage default risk by

A) more careful screening of loan applicants.
B) the use of adjustable rate mortgages.
C) Short term borrowings in the eurodollar market.
D) Only issuing insured deposits.

Question 34

Savings association can manage liquidity risk by

A) more careful screening of loan applicants.
B) the use of adjustable rate mortgages.
C) short term borrowings in the eurodollar market.
D) only issuing insured deposits.

Question 35

The lender of last resort for credit unions is

A) the Fed.
B) the FDIC.
C) the Central Liquidity Facility.
D) the National Credit Union Association.

Question 36

The largest asset for savings associations is

A) mortgage loans.
B) checkable deposits.
C) government securities.
D) Reserves, since the collapse of the industry in the late 1980s.

Question 37

Share certificates are

A) interest-bearing checking accounts of credit unions.
B) highly liquid credit union deposits that can be withdrawn on demand, but not by writing a check.
C) the credit union equivalent of a certificate of deposit (CD).
D) None of the above.

Question 38

Share accounts are

A) interest-bearing checking accounts of credit unions.
B) highly liquid credit union deposits that can be withdrawn on demand, but not by writing a check.
C) the credit union equivalent of a certificate of deposit (CD).
D) None of the above.

Question 39

Share draft accounts are

A) interest-bearing checking accounts of credit unions.
B) highly liquid credit union deposits that can be withdrawn on demand, but not by writing a check.
C) the credit union equivalent of a certificate of deposit (CD).
D) None of the above.

Question 40

Which of the following is false?

A) Credit unions are exempt from corporate taxes and the Community Reinvestment Act (CRA).
B) Credit unions are exempt from corporate taxes because they are not-for-profit organizations.
C) Today, there are more credit unions than ever.
D) Most credit unions are small in size.

Question 41

Credit unions manage default risk by

A) holding collateral.
B) requiring mortgage insurance.
C) utilizing expert credit analysis.
D) All of the above.

Question 42

Today, deposits in savings association are insured by the

A) Savings Association Insurance Fund.
B) FDIC
C) Resolution Trust Corporation.
D) Office of Thrift Supervision.