Posted in Trust Business Loans News & Information on September 19, 2011
When most people think of loans, they think of a bank. When most people think of a bank, they think of an institution that holds deposits from individuals and businesses. But what happens when there are institutions that lend money but don’t accept bank deposits?
The “Shadow Banking System”, as it’s commonly referred to, includes pretty much all lenders, investors, and insurance outfits that don’t accept deposits. These entities are not regulated as stringently as are FDIC banks.
For more information on the subject, I suggest checking out both Wikipedia and Investopedia.
Here at Trust, we service lending products that fall primarily into the world of “shadow lending”. But while that might sound a little eerie, it simply means that the funding is coming from institutions which are not deposit-accepting banks.
Share Your Thoughts!