Why A Bank Serves A Geographic Area

Analysis and evaluation stage is a single channel, interest rate multi channel, loan terms single channel, and final issuing a multichannel. (Exhibit A)The current structure of the analysis and evaluation stage does not maximize staff time effectively and as a consequence creates a bottleneck in the process. With the single channel structure loan applications are unevenly distributed among teams and create higher idle time for teams with less volume of loan applications to process. Utilization among regions varies greatly between 73% - 95%. The following observation of the current structure was achieved using the MMK model (See exhibit B):

Location - where regional divisions of the business take responsibility for a specific function or particular products, whether locally, nationally or internationally

With the obvious incentives of complying with the CRA, local bankers began to tap into markets that would have been considered prior to CRA enforcement in the late 70’s. These lower-income areas proved fiscally viable, and began to draw the attention of financial institutions other than depository banks. These investment banks were involved in speculative investment and resale of mortgages and were not regulated under the terms of the CRA. Non-CRA covered lending institutions have played an increasingly large role in lending to low-income neighborhoods since the law was enacted.

The following information will show whether or not the manager’s speculations are correct. He wants to know the following information: Is the average mean greater than $45,000? Does the true population proportion of customers who live in an urban area exceed 45%? Is the average number of years lived in the current home less than 8 years? Is the credit balance for suburban customers more than $3200? Hypothesis testing and confidence intervals for situations A-D are calculated.

The First Bank of the United States was established in 1791 by Alexander Hamilton to serve as a central bank for the country to store government funds, to collect taxes, and to issue a standard form of currency. The bank was also established because of the enormous debt from the Revolutionary War. The Second Bank of the United States was chartered in 1816 by the Congress and was supplied one-fifth of its funds of $35 million with the same responsibilities and powers as the First Bank. However, the Second Bank did not enjoy the limited success of the First Bank. The Second Bank was put with poor management. The Bank was supposed to maintain a currency principle, but instead the ratio moved around between 12 and 65 percent. It also quickly divided

The Department of Financial Institutions recently conducted a limited scope participated examination of Envoy Mortgage Ltd, in Houston, TX. The examination was conducted in accordance with Chapters 13-04.1 and 13-10 of the North Dakota Century Code and Chapter 13-05-01 of the North Dakota Administrative Code.

The metropolitan classification program is used to determine home mortgage loans, loyalty pay program and varying policies within the Medicare program. The geographic established boundaries of a metropolitan area are representative of that area’s marketplace. Property data collected from the area is reported to bank regulators who will use the data to evaluate lending performance. The data collected could potentially cause bank regulators to consider altering lending practices to suit the area.

Banks like Citibank (C) or any other banks in an exchange-traded fund (or ETF) like the Financial Select Sector SPDR (XLF) don’t get such a high rating. XLF includes all the important

Asymmetric information in lending is a huge risk. When there is misinformation from a lender to a borrower, this can cause a few different problems to arise; for example misinformation about job security or credit history from a borrower to a lender can result in late or missed payments, fraudulent spending of the money lent or the lending amount to be turned as bad debt. Specialization is a tool used for risk management. Specialization in lending helps reduce risk by gathering valuable and accurate information about the borrower. It

In case you've ever wondered how your bank or other organizations decide whether to give you a credit card, extend you a loan or even grant you a mortgage, it's simple. They can determine if you are creditworthy by scoring you based on how well you've dealt with money and your monetary obligations in the past.

Regulatory environment consist of several laws and regulations that has been developed by federal, state, and local governments in order to limit control over business practices. The regulatory environment plays an important role in the positive operation of the financial sector and in the efficient management and integration of capital flow and domestic savings. “The value of the claims of financial institutions on borrowers is dependent upon the

Beside internal factors, we examine the external factors, Opportunities and Threats, of KBRA. The incumbent credit raters’ fail in the financial crisis gave an opportunity for new rating agencies like KBRA. After the financial crisis, the government and the investors realized the importance of appropriate corporate credit rating. The government might tend to subsidize newly-established rating organizations and create new regulations for credit rating in order to eliminate the oligopoly of three big financial agencies. KBRA benefits from such environment. Also, it is easier for small or new rating agencies like KBRA to apply a new revenue model under revised regulations.

• Compliance: Evaluating adequacy of compliance risk management and assessing banks’ effectiveness in identifying and responding to risks posed by new products, services, or terms. Examiners will also assess compliance with the following: – new requirements for integrated mortgage disclosure under the Truth in Lending Act of 1968 and the Real Estate Settlement Procedures Act of 1974. – relevant consumer laws, regulations, and guidance for banks under $10 billion in assets. – Flood Disaster Protection Act of 1973 and the Service members Civil Relief Act of 2003.

Thus, each bank needs to differentiate their product offers to customer, strengthen their portfolio, and improve services, etc depending on its strategies.

Geographic distance between lender and borrower is another possible explanation for the effect of the banking network on small business lending. Distance acts as an obstacle for banks in assessing loan applications, and raises the opportunity cost for borrowers to negotiate for the best offers (Sussman \& Zeira, 1995, Sussman \& Zeira, 1995). Mortgage lending, although less dependent on ``soft information", benefits from banking networks as well. Ergungor (2010) finds access to physical branches promotes mortgage originations and lowers the mortgage spreads in low-to-moderate income (LMI) neighborhoods.