Banking and Finance Law Are Customers Rights

Banking and Finance Law

Are Customers Rights Really Protected?

For many of us, dealing with our banks is a daily occurance. With today's technology, most of us use money access machines and online banking as comfortably as we use our television sets our automobiles. But is our money truly protected? Most of us would say, without a doubt, that it was protected. In fact, most of us have not had major problems when it comes to dealing with our accounts. But, how does the undue influence that our financial institutions have over us shape how we invest our money? In 1996, a woman in London was awarded nearly 80,000 pounds after she and her boyfriend were given bad advice on a property deal by Lloyds Bank. ("Lloyds' Blunder Cost Woman Pounds 10,000 Pay") This is just one story in a string of stories of how banks use their influence to sway our money making decisions in their favor. So how safe is the banking system really and are the laws that govern these insitutions enough to protect most consumers who utilize the banking system today?. Before we take a closer look, let's discuss the history of banking.

Banking is fundamentally the business of dealing in money and instruments of credit. In the past, banks were divergent from other financial institutions by their principal functions of accepting deposits (subject to withdrawal or transfer by check) and of making loans to qualified customers. Banks have commonly been catogorized according to their main services. The main categories are commercial banks, (which include national and state-chartered banks), trust companies, stock savings banks, and industrial banks, have traditionally rendered a wide range of services in addition to their primary functions of making loans and investments and handling demand as well as savings and other time deposits. Mutual savings banks accepted only savings and other time deposits, and sold limited types of loans and services. The reality that commercial banks were able to extend or shrink their loans and investments in conformity with changes in reserves and reserve stipulations made them even more distinct from mutual savings banks, where the volume of loans and investments was governed by changes in customers' deposits. Membership in the Federal Deposit Insurance Corporation is mandatory for all Federal Reserve member banks but discretionary for other banks. (Blinder)

The types of financial establishments that have not commonly been dependent on the supervision of state or federal banking controls but have performed one or more of the conventional banking functions are savings and loan associations, mortgage companies, finance companies, insurance companies, credit agencies (owned wholly or in part by the federal government) credit unions, brokers and dealers in securities and investment bankers.

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The International Bank for Reconstruction and Development (World Bank) was organized in 1945 to make loans both to governments and to private investors. The discharge of debts between nations has been clarified and uncomplicated through the International Monetary Fund (IMF), which also provides members with technical assistance in international banking. The former European Monetary Agreement also made possible the rapid discharge of debts and balance of payments obligations between nations. The European Central Bank (see European Monetary System) was established in 1998 to help formulate the joint monetary policy of those European Union nations adopting a single currency. (Blinder)

Banking in its simplest form was practiced by the ancient temples of Egypt, Babylonia, and Greece, which loaned at high rates of interest the gold and silver deposited for safekeeping. Private banking existed by 600 B.C. And was considerably developed by the Greeks, Romans, and Byzantines. (Binhammer) Medieval banking was dominated by the Jewish and Levantines because of the strictures of the Christian Church against interest and because many other occupations were largely closed to Jews. "The forerunners of modern banks were frequently chartered for a specific purpose, e.g., the Bank of Venice (1171) and the Bank of England (1694), in connection with loans to the government; the Bank of Amsterdam (1609), to receive deposits of gold and silver." (Granger) Banking developed rapidly throughout the 18th and 19th centuries, accompanying the expansion of industry and trade, with each nation evolving the distinctive forms peculiar to its economic and social life.