Finance Banking

Guide To Banking Law In USA

Published at 07/12/2011 22:08:42

In the USA banks are bound to follow the rules stipulated by the Federal Reserve Bank, which acts as the regulator of financial institutions, such as banks, in order to protect those institutions and the customers they serve. This regulations cover financial transactions provided by banks, such as loans, deposits, account withdrawals, etc. We shall endeavor to look the basic premise for these rules, and how they are intended to act in USA banking.

The Federal Reserve Bank is tasked with the responsibility of enforcing the rules and regulations, which cover banking law in the USA. These laws covers three specific areas, as far as the accessibility and security of bank transactions are concerned.

These laws cover:

· The availability of funds: According to federal law, banks are required to make funds available the next business day, after receipt of a deposit through a cash deposit, electronic transfer, US postal service money orders, US treasury checks, cashiers and certified checks, and checks written on an account held by the bank. Where deposits are made in local checks, the funds should be available within two days, whereas for nonlocal checks, funds should be ready by five days.

· The electronic transfer of funds: Federal law also governs the transactions processed electronically, through the internet. Through it, account holders are provided a certain level of protection from any fraudulent transactions that may occur in their accounts. But account holders have a part to play, in regards to the time frame required to report such illegal transactions. Always report such cases to your banks as soon as you notice them.

· The extension of credit: Federal law requires banks to extend credit to qualified customers, regardless of their national origin, gender, religion, race or marital status. Banks are also required to disclose all charges, payment amounts, interest rates, and the dates due for payment once credit has been granted.

Tips and comments:

Banking laws in the USA are designed to protect banks and their customers, from unfair financial practices and ensure the security of deposits, once in the care of the banks.