Alternative Financial Services (AFS): Financial services that are not federally-insured. These include check cashing, money orders, payday loans, refund anticipation loans/checks, and other services that are provided outside of mainstream financial institutions. Also see Indirect Costs, Unbanked, and Underbanked.
Asset Development: The process of increasing financial or tangible resources such as savings, a home, or investment in education or businesses.
Banked: People who have a savings and/or checking account and do not use Alternative Financial Services.
ChexSystems: A check verification database that financial institutions use to assess the risk level of potential customers.
Credit History: A record of the debt a person accumulates and payments made. This record is used to assess the risk level for approving apartment leases, car loans, and home mortgages.
Discriminatory or Predatory Lending Services: The practice of issuing high-interest loans with unfair terms to borrowers who are unlikely to be able to repay them.
Economic Security: The ability to maintain a sustainable income and pay monthly bills while increasing savings and assets.
Economic Self-Sufficiency: The ability to pay all bills, groceries, and child care expenses independently without loans or government assistance programs.
Federally-Insured Program: Practice of the Federal Deposit Insurance Corporation, which insures all deposits in savings and checking accounts up to $250,000, guaranteeing the safety of money kept in a bank account.
Financial Transactions: When money is exchanged or deposited. Basic financial transactions include purchases, deposits into bank accounts, or withdrawals from ATMs.
Indirect Costs: Non-monetary costs associated with the use of Alternative Financial Services and not participating in asset and credit building opportunities (i.e. the inability to establish a credit history).
Mainstream Financial Services: Bank accounts, investments, and credit transactions that take place within the federally-insured financial system.
Payday Loans: Small, short-term, high-interest loans which often lead to long-term debt for borrowers.
Unbanked: People who do not have checking or savings accounts, conduct financial transactions primarily in cash, and rely on Alternative Financial Services.
Underbanked: People who have a bank account—checking or savings—and still use Alternative Financial Services.
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