financial services

Churning

An unethical business practice by some stock brokers where excessive trade is made in a client's account in order to generate more commission from the account.  Churning prohibited by many securities laws and is judicially actionable.

Closed-end Loan

Definition from Nolo’s Plain-English Law DictionaryA loan that must be paid off within a certain period of time. Compare: open-ended loan

Definition provided by Nolo’s Plain-English Law Dictionary.

Coinsurance

Definition

A risk-sharing agreement between the insurer and the insured under a particular insurance policy.  The insured agrees to cover a percentage of the losses up to a certain threshold level, rather than paying a fixed amount as with co-pay...

Collateral

Property or assets that are committed by an individual in order to guarantee a loan.  Upon default, the collateral becomes subject to seizure by the lender and may be sold to satisfy the debt.

EXAMPLE

In securing a mortgage, the...

Collection Agency

Definition from Nolo’s Plain-English Law DictionaryA company hired by a creditor to collect a debt. Creditors typically hire a collection agency only after having tried -- and failed -- to collect the debt on their own.

Definition provided by Nolo’s...

Comaker

A person who cosigns a check, draft or other negotiable instrument with another person or persons.  Each comaker has a legal obligation to pay the entire amount due on the instrument, should one of the parties default. 

Commerce

In 15 U.S.C. §1127:

 1) The exchanging, buying, or selling of things having economic value between two or more entities, for example goods, services, and money.  Commerce is often done on a large scale, typically between individuals,...

Commerce Clause

Overview   

 

The Commerce Clause refers to Article 1, Section 8, Clause 3 of the U.S. Constitution, which gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian

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Compound Interest

Definition from Nolo’s Plain-English Law DictionaryInterest paid at least in part on accumulated interest. For example, if interest on a savings account is compounded monthly, the depositor is paid interest on the amount deposited after the first month....

Confession of Judgment

Definition from Nolo’s Plain-English Law DictionaryUsually, a clause within a promissory note, allowing the creditor to, upon nonpayment by the borrower, get a court judgment for the amount owed and in some cases collect from the borrower's assets, all...

Conforming Loan

Definition from Nolo’s Plain-English Law DictionaryA mortgage loan small enough to be bought by Fannie Mae or guaranteed by the Federal Housing Administration. The dollar limit on conforming loans is adjusted periodically and is higher in areas with a...

Consumer Credit

Consumer Credit: An Overview

Credit allows consumers to finance transactions without having to pay the full cost of the merchandise at the time of the transaction. A common form of consumer credit is a credit card account issued by a financial...

Consumer Credit Counseling Service (CCCS)

Definition from Nolo’s Plain-English Law DictionaryA nonprofit agency with offices in a number of states. It offers free or low-cost debt and credit counseling.

Definition provided by Nolo’s Plain-English Law Dictionary.

Consumer Report

Definition from Nolo’s Plain-English Law DictionaryWritten or oral information provided by a consumer reporting agency that relates to a person's credit worthiness, credit standing, credit capacity, character, personal characteristics, or lifestyle, to be...

Consumer Reporting Agencies (CRA)

An entity that furnishes consumer reports including those that compile and maintain files on consumers in a nationwide basis and those that do so restricted to certain categories of records including:  medical records or payments, residential or...

Contingent Annuity

Definition from Nolo’s Plain-English Law DictionaryAn annuity whose amount of payment (or the payee) is not certain and depends on a specific future event.

Definition provided by Nolo’s Plain-English Law Dictionary.

Contract for Deed

 A contract used for seller financing where the seller will keep title to the property until the buyer pays off the loan. After the buyer pays off the entire loan, the seller signs a deed transferring title to the buyer.

Definition provided by Nolo...

Contractual Lien

Name for a category of liens that stem from contracts and do not depend on the common law or statutes for their existence.  A contractual lien is essentially a contract that gives a security interest in property to one of the parties involved....

Contribution

Business Law Definition

In business and partnership law, contribution may refer to a capital contribution, which is an amount of money or assets given to a business or partnership by one of the owners or partners. The capital contribution increases the...

Cosign

Definition from Nolo’s Plain-English Law DictionaryTo sign a document -- such as a promissory note or lease -- along with another person in order to share responsibility for the obligation.

Definition provided by Nolo’s Plain-English Law Dictionary.

Cosigner

Definition from Nolo’s Plain-English Law DictionaryA person who signs his or her name to a loan agreement, lease, or credit application. If the primary debtor does not pay, the cosigner is fully responsible for the loan or debt. Many people use cosigners...

Cost Basis

Definition from Nolo’s Plain-English Law DictionarySee: basis

Definition provided by Nolo’s Plain-English Law Dictionary.

Cram-down

Definition from Nolo’s Plain-English Law DictionaryIn Chapter 13 bankruptcy, a reduction in the amount of a secured debt the debtor must repay to the replacement value of the collateral securing the debt. For example, if a debtor owes $5,000 on a car that...

Credit

Definition

In the accounting context, it is the entry on the right-hand side of the balance sheet.  Credit can decrease the value of an asset or it can increase the amount of capital, liability or revenue.  It is a form of debt.

Credit Bureau

Definition from Nolo’s Plain-English Law DictionarySee: credit reporting agency

Definition provided by Nolo’s Plain-English Law Dictionary.

Credit Card Accountability Responsibility and Disclosure Act (2009)

Also known as the Credit CARD Act.  Federal legislation that ends some deceptive practices used by credit card companies.  Some of these practices result in consumers being trapped in expensive debt.

Credit Card Accountability Responsibility and Disclosure Act of 2009

Definition from Nolo’s Plain-English Law Dictionary

A consumer protection law also called the Credit CARD Act. Among its provisions is a prohibition against retroactive rate increases, a requirement that terms be clearly spelled out, and an extension of...

Credit CARD Act

Definition from Nolo’s Plain-English Law Dictionary

See: Credit Card Accountability Responsibility and Disclosure Act of 2009

Definition provided by Nolo’s Plain-English Law Dictionary.

Credit Card Fraud

credit card fraud: an overview

Credit card fraud is a form of identity theft that involves an unauthorized taking of another’s credit card information for the purpose of charging purchases to the account or removing funds from it. Federal law ...

Credit Counseling

Definition from Nolo’s Plain-English Law DictionaryCounseling that explores the possibility of repaying debts outside of bankruptcy and educates the debtor about credit, budgeting, and financial management. Under the 2005 bankruptcy law, a debtor must...

Credit Default Swap

A type of derivative contract in which two parties bet on the risk that some credit instrument will go into default.  Abbreviated as CDS.  The buyer of a CDS agrees to make periodic payments to the seller.  The seller agrees to pay a...

Credit File

Definition from Nolo’s Plain-English Law DictionarySee: credit report

Definition provided by Nolo’s Plain-English Law Dictionary.

Credit Instrument

A promissory note or other written evidence of a debt.  Examples include bonds and loans.

Credit Insurance

Definition from Nolo’s Plain-English Law DictionaryAn insurance policy a lender requires a borrower to purchase to cover a loan. If the borrower dies or becomes disabled before paying off the loan, the policy will pay off the remaining balance.

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Credit Report

Definition from Nolo’s Plain-English Law DictionaryA written account of a consumer's credit history prepared by a credit reporting agency. Credit reports generally include information on loans, credit cards, and other bills and accounts, as well as a...

Credit Reporting Agency

Definition from Nolo’s Plain-English Law DictionaryA private company that collects and sells information about a person's credit history. Clients, such as banks, mortgage lenders, credit card companies, landlords, and potential employers, use the...

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