Financial LawFinancial LawCoach Johnson

Understanding Business and Personal Law

Creditor and DebtorCreditor and Debtor

Borrowing money from someoneLoaning money to someoneInterestOpen ended vs. Closed ended◦Credit Card vs. Loan

Review the Sample Questions on Page 485

Secured LoansSecured Loans

Truth in Lending ActMust use collateralRepossession without violence◦If 60% has been paid, the secured party must

sellCo Signatures

Credit CardsCredit Cards

U.S. household consumer debt profile:Average credit card debt: $15,266Average mortgage debt: $149,667Average student loan debt: $32,559In total, American consumers owe:$11.31 trillion in debt

◦ A decrease of 1.5% from last year

$850.9 billion in credit card debt$7.98 trillion in mortgages$986.8 billion in student loans

◦ An increase of 11.2% from last year

Resource

Average family – 13 cards

Read example on page 488 to get idea

Disputed Purchases◦100 miles within zip◦Cannot affect score

Lost Credit Cards◦Responsible for $50

Credit Block

Credit Protection LawsCredit Protection Laws

Equal Credit Opportunity Act◦Cannot discriminate (sex, race, marital status,

national origin, religion, age, or public assistance)Fair Credit Reporting Act

◦Equifax, Trans Union, Experian◦Entitled to one free per year ($9 fee after that)

Fair Credit Billing Act◦Writing within 60 days

Fair Debt Collection Practices Act◦Cannot collect more than what is owned◦Cannot disrupt the peace

Assignment #1Protect Your Identity

Download from Website, type, print and turn in.

(Personal Project Grade)

Assignment #2EverFi (Daily Grade)

Checking AccountsChecking Accounts

Use/OpeningGood for mail payment; receipts6 months without cashing=may be

refused (stale)Bank pays up to amount you have

deposited (bounced check)

Checking AccountsChecking Accounts

Receiving a Bank Statement◦Check for:

Outstanding Checks Incorrect Debits Incorrect Fees

Writing ChecksFill out correctlyStart at left, drawn line through remainingVoiding CheckNever sign before check is given outCash Check (same as cash)

Example CheckExample Check

Example Deposit SlipExample Deposit Slip

Example Check RegisterExample Check Register

ReconciliationReconciliation

Used to find missing deposits/creditsBalance

More Check TopicsMore Check Topics

Bad Checks (bounced) ◦Fee◦Overdraft Protection

Forgery ◦Bank responsible if no negligence

Stop Payment◦Sometimes a fee

Other Payment MethodsOther Payment Methods

Certified Check◦Funds are guaranteed to be withdrawn◦Funds set aside make it “Certified”◦Avoids fraudulent checks

Cashiers Check◦ Issued by bank from their funds◦Taken from persons funds by withdrawal or check

Bank Drafts◦Check written by bank from their own funds

Money Order◦Given money (not necessarily from account)◦Only transferred once◦Name/Address and Name of Payee

Other Payment MethodsOther Payment Methods

Traveler’s Check◦Service Fee◦Sign in front of bank◦Sign in front of purchase establishment◦Easily replaceable

Holding Time chart on page 532

Electronic BankingElectronic Banking

EFT◦ATM◦Online

Debit CardDirect Deposit

Assignment #2Assignment #2

Bankruptcy Project(Group Project Grade)