About Federal Bank Regulations

Video Transcript

"Hi, my name is Matt McKillin, I'm with Innovative Financial Group. A question posed to me today was regarding federal bank regulations. Any bank that operates in the United States, and this isn't what we would call a mortgage bank but a federally chartered bank. Basically what they're doing is they're making loans, they're also holding depository accounts or asset accounts for their clients. This may be checking, savings, IRAs . Anytime a bank is holding those type of asset accounts for borrowers, there are certain types of regulations that the bank must follow by. As you probably heard that when you have a checking or savings account with a bank, that you're insured by the FDIC. Well the FDIC basically offers insurance on personal accounts up to two hundred fifty thousand dollars and if some reason that bank was to go under or become insolvent, that your money is safe up to that dollar amount. The federal government will back it. In doing so, the fed likes to regulate what types of bank activities are involved. They do not like these banks to make high risk loans for example. There's really a lot of regulations involved in what a bank or bank cannot do when they're holding these depository accounts for clients. The banks that are out there that do not offer checking, savings,CDs, don't hold depository money, are not under the same strict regulations as regular federally chartered bank. Again, my name is Matt McKillen, I'm with Innovative Financial Group."