Financial Terms Glossary...

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
B

 

Board of Directors

Volunteers charged with providing the general direction and control of a credit union or other financial institution. Officers of a credit union (chairman, vice chairman, etc.) are selected from the board membership.

 

Bylaws

A code established to form the organization of the credit union and specifies how the institution will b e governed in its day-to-day operations. Federal credit unions are required to adopt a basic bylaws code that must be approved by the National Credit Union Administration.

 

C

 

CAMEL Rating System
The CAMEL rating system is a method of evaluating the health of credit unions by the National Credit Union Administration.The rating system is based upon five elements of a credit union's operations: Capital adequacy, Asset quality, Management, Earmings and Liquidity.

 

Cap
Limit on how much the interest rate or the monthly payment can change, either at each adjustment or during the life of the adjustable rate loan.

Capital
The measure of a credit union’s ability to withstand troubled times. A credit union’s base capital represents the total of regular (statutory) reserves, other reserve accounts and undivided earnings. The regulatory capital also includes allowances for loan and investment losses.

Certificate of Deposit (CD)
Funds deposited in a financial institution for a specific period of time at a specific interest rate.

Check Hold
When an amount of a member's account balance is held until funds are released or a set period of time expires. (Depending on the institution, dividends or interest are not earned on held funds.)

 

 

Christmas (Holiday) & Vacation Club Accounts

Annual savings clubs where the member or consumer sets the savings amount that will be automatically drawn from another account.

 

Clearing
Process by which a payment transaction order is processed from the initiator of the order to the final recipient.

Compound Interest
The amount of simple interest applied to the original principal plus the accumulated interest.

 

Collateral
Asset(s) that are pledged as security until a loan is repaid. The collateral is subject to forfeiture if the borrower defaults on the loan.

 

Common Bond
A group with a common interest, such as the same employer, association or community.