BANKING GLOSSARY (Alphabet-C)

Canceled Check :
A check that a bank has paid, charged to the account holder’s account, and then endorsed. Once canceled, a check is no longer negotiable.

Cashier’s Check:
A check drawn on the funds of the bank, not against the funds in a depositor’s account. However, the depositor paid for the cashier’s check with funds from their account. The primary benefit of a cashier’s check is that the recipient of the check is assured that the funds are available.

Cease and Desist Letter:
A letter requesting that a company stops the activity mentioned in the letter.

Certificate of Deposit:
A negotiable instrument issued by a bank in exchange for funds, usually bearing interest, deposited with the bank.

Certificate of Release:
A certificate signed by a lender indicating that a mortgage has been fully paid and all debts satisfied.

Certified Check:
A personal check drawn by an individual that is certified (guaranteed) to be good. The face of the check bears the words “certified” or “accepted,” and is signed by an official of the bank or thrift institution issuing the check. The signature signifies that

  • the signature of the drawer is genuine, and 
  • sufficient funds are on deposit and earmarked for payment of the check.

Charge-off:
The balance on a credit obligation that a lender no longer expects to be repaid and writes off as a bad debt.

Check:
A written order instructing a financial institution to pay immediately on demand a specified amount of money from the check writer’s account to the person named on the check or, if a specific person is not named, to whoever bears the check to the institution for payment.

Check 21 Act:
Check 21 is a Federal law that is designed to enable banks to handle more checks electronically, which is intended to make check processing faster and more efficient. Check 21 is the short name for the Check Clearing for the 21st Century Act, which went into effect on October 28, 2004.

Check Truncation:
The conversion of data on a check into an electronic image after a check enters the processing system. Check truncation eliminates the need to return canceled checks to customers.

Checking Account:
A demand deposit account subject to withdrawal of funds by check.

Closed-End Credit :
Generally, any credit sale agreement in which the amount advanced, plus any finance charges, is expected to be repaid in full by a specified date. Most real estate and automobile loans are closed-end agreements.

Closed-End Loan:
Generally, any loan in which the amount advanced, plus any finance charges, is expected to be repaid in full by a specified date. Most real estate and automobile loans are closed-end agreements.

Closing a Mortgage Loan:
The consummation of a contractual real estate transaction in which all appropriate documents are signed and the proceeds of the mortgage loan are then disbursed by the lender.

Closing Costs:
The expenses incurred by sellers and buyers in transferring ownership in real property. The costs of closing may include the origination fee, discount points, attorneys’ fees, loan fees, title search and insurance, survey charge, recordation fees, and the credit report charge.

Collateral:
Assets that are offered to secure a loan or other credit. For example, if you get a real estate mortgage, the bank’s collateral is typically your house. Collateral becomes subject to seizure on default.

Collected Funds:
Cash deposits or checks that have been presented for payment and for which payment has been received.

Collection Agency:
A company hired by a creditor to collect a debt that is owed. Creditors typically hire a collection agency only after they have made efforts to collect the debt themselves, usually through letters and telephone calls.

Collection Items:
Items-such as drafts, notes, and acceptances-received for collection and credited to a depositor’s account after payment has been received. Collection items are usually subject to special instructions and may involve additional fees. Most banks impose a special fee, called a collection charge, for handling collection items.

Collective Investment Funds (CIFs):
A Collective Investment Fund (CIF) is a trust created and administered by a bank or trust company that commingles assets from multiple clients. The Federal securities laws generally require entities that pool securities to register those pooled vehicles (such as mutual funds) with the SEC. However, Congress created exemptions from these registration requirements for CIFs so long as the entity offering these funds is a bank or other authorized entity and so long as participation in the fund is restricted to only those customers covered by the exemption. If these limitations are met, CIFs are exempt from SEC registration and reporting requirements.

Co-Maker:
A person who signs a note to guarantee a loan made to another person and is jointly liable with the maker for repayment of the loan. (Also known as a Co-signer.)

Community Reinvestment Act:
The Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods. It was enacted by the Congress in 1977.

Consumer Credit Counseling Service:
A service which specializes in working with consumers who are overextended with debts and need to make arrangements with creditors.

Consumer Reporting Agency:
An agency that regularly collects or evaluates individual consumer credit information or other information about consumers and sells consumer reports for a fee to creditors or others. Typical clients include banks, mortgage lenders, credit card companies, and other financing companies.

Conventional Fixed Rate Mortgage:
A fixed-rate mortgage offers you a set interest rate and payments that do not change throughout the life, or “term,” of the loan.
A conventional fixed-rate loan is fully paid off over a given number of years-usually 15, 20, or 30. A portion of each monthly payment goes towards paying back the money borrowed, the “principal”; the rest is “interest.”

Co-Signer:
An individual who signs the note of another person as support for the credit of the primary signer and who becomes responsible for the obligation. (Also known as a Co-maker.)

Credit Application:
A form to be completed by an applicant for a credit account, giving sufficient details (residence, employment, income, and existing debt) to allow the seller to establish the applicant’s creditworthiness. Sometimes, an application fee is charged to cover the cost of loan processing.

Credit Bureau:
An agency that collects individual credit information and sells it for a fee to creditors so they can make a decision on granting loans. Typical clients include banks, mortgage lenders, credit card companies, and other financing companies. Also commonly referred to as a consumer reporting agency or a credit reporting agency.

Credit Card Account Agreement:
A written agreement that explains the

  • terms and conditions of the account,
  • credit usage and payment by the cardholder, and
  • duties and responsibilities of the card issuer.


Credit Card Issuer:
Any financial institution that issues bank cards to those who apply for them.

Credit Disability Insurance:
A type of insurance, also known as accident and health insurance, that makes payments on the loan if you become ill or injured and cannot work.

Credit Life Insurance:
A type of life insurance that helps repay a loan if you should die before the loan is fully repaid. This is optional coverage.

Credit Limit:
The maximum amount of credit that is available on a credit card or other line of credit account.

Credit Repair Organization:
A person or organization that sells, provides, performs, or assists in improving a consumer’s credit record, credit history or credit rating (or says that that they will do so) in exchange for a fee or other payment. It also includes a person or organization that provides advice or assistance about how to improve a consumer’s credit record, credit history or credit rating. There are some important exceptions to this definition, including many non-profit organizations and the creditor that is owed the debt.

Credit Report:
A detailed report of an individual’s credit history prepared by a credit bureau and used by a lender in determining a loan applicant’s creditworthiness.

Credit Score:
A number, roughly between 300 and 800, that measures an individual’s credit worthiness. The most well-known type of credit score is the FICO® score. This score represents the answer from a mathematical formula that assigns numerical values to various pieces of information in your credit report.
Banks use a credit score to help determine whether you qualify for a particular credit card, loan, or service.

Cut-Off Time:
A time of day established by a bank for receipt of deposits. After the cut-off time, deposits are considered received on the next banking day.

For  Alphabet-A click here

For Alphabet-B click here

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