A financial institution is a broad term that refers to organizations that provide financial services to individuals, businesses, and governments. These institutions play a crucial role in the functioning of an economy by facilitating the flow of money and capital. Financial institutions can be classified into various categories based on their services and functions.
Financial institutions are heavily regulated to ensure the stability and integrity of the financial system. They are subject to oversight by government authorities and regulatory bodies to maintain confidence in the financial markets and protect the interests of depositors and investors.
Financial institutions include an insured depository institution (as defined in section 3(c)(2) of the Federal Deposit Insurance Act); an insured credit union, a Federal home, a member institution of the Farm Credit System; a small business investment company, as defined in section 103 of the Small Business Investment; a depository institution holding company (as defined in section 3(w)(1) of the Federal Deposit Insurance Act; a Federal Reserve bank or a member bank of the Federal Reserve System; an organization operating under the Federal Reserve Act; a branch or agency of a foreign bank as defined by the International Banking Act of 1978; a mortgage lending business; or any person or entity that makes federally related mortgage loans under the Real Estate Settlement Procedures Act of 1974.
