![Reference Guide: Banking Acronyms](/content/blog/ic_1718057042_1920x_false.jpg)
Banking Reference Guide: Acronyms A-Z
Banking Acronyms A-Z
Welcome to the Banking Acronym Reference Guide, your resource for understanding everyday banking and financial services industry acronyms.
This guide will help new bankers navigate the alphabet soup of banking, enhance their communication skills, and build confidence in their professional interactions. It also serves as a handy refresher for seasoned bankers, helping them stay current with the latest acronyms in the evolving financial industry.
Use it for quick reference to ensure effective communication with colleagues, clients, and regulators, maintaining clarity and professionalism.
This guide will help new bankers navigate the alphabet soup of banking, enhance their communication skills, and build confidence in their professional interactions. It also serves as a handy refresher for seasoned bankers, helping them stay current with the latest acronyms in the evolving financial industry.
Use it for quick reference to ensure effective communication with colleagues, clients, and regulators, maintaining clarity and professionalism.
A - E
ACH - Automated Clearing House: A network that electronically moves money between bank accounts across the United States. ACH transactions are used to direct deposit payroll, automatic bill payments, and other types of electronic funds transfers. ACH transfers are known for being secure, reliable, and relatively fast, though not instant.
AI - Artificial Intelligence: The simulation of human intelligence in machines. AI systems can perform tasks like recognizing speech, making decisions, solving problems, understanding language, and interpreting visuals. It includes machine learning and robotics techniques to create autonomous systems that improve over time.
ALCO - Asset-Liability Committee: A bank management committee responsible for overseeing the bank’s assets and liabilities. Its main goal is to manage interest rates, liquidity, and capital risks. The committee ensures a balance between assets and liabilities to maintain financial stability and profitability, making strategic investments, funding, and product pricing decisions.
AML - Anti-Money Laundering: AML encompasses laws, regulations, and procedures to prevent criminals from converting illicit funds into legitimate income. Financial institutions implement AML programs to detect and report suspicious activities, ensuring illicit funds do not enter the legitimate financial system.
AML/KYC - Anti-Money Laundering/Know Your Customer: AML/KYC combines processes for preventing money laundering and verifying customer identity. AML involves detecting and reporting suspicious activities, while KYC focuses on verifying customers’ identities. Together, these processes help financial institutions prevent illegal activities by understanding and monitoring customer transactions.
APY - Annual Percentage Yield: The effective annual rate of return that accounts for the effect of compounding interest over a year. It provides a standardized way to compare the returns of various investment and savings options.
APR - Annual Percentage Rate: The annual rate charged for borrowing or earning through an investment, expressed as a percentage. It includes fees or additional costs associated with the transaction, providing a comprehensive measure of the price or return.
ALM - Asset Liability Management: A strategic approach financial institutions use to manage the risks that arise from mismatches between the assets and liabilities on their balance sheets. ALM aims to optimize the balance between risk and return by controlling factors such as interest rates, liquidity, and the duration of assets and liabilities. This helps ensure the institution can meet its financial obligations while maximizing profitability.
ATM - Automated Teller Machine: An ATM allows bank customers to conduct basic transactions, such as making cash withdrawals, depositing funds, and checking account balances, without needing a branch teller. ATMs provide convenient, 24/7 access to banking services.
BSA - Bank Secrecy Act: The BSA is U.S. legislation that prevents money laundering by requiring financial institutions to keep detailed records and file reports on transactions that may indicate illegal activities. These records and reports help authorities detect and investigate money laundering and other financial crimes.
CAMELS - Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, Sensitivity: A rating system used by regulators to evaluate the health of financial institutions. It assesses six key areas to determine a bank’s overall condition and ability to manage risks effectively.
CBWN - Community Bankers Webinar Network: Your first stop for online bank training on topics affecting everyone at every level of your bank. Find over 250+ live or on-demand webinars.
CD - Certificate of Deposit: A savings account with a fixed interest rate and a fixed date of withdrawal, known as the maturity date. CD's typically offer A higher interest rate than regular savings accounts in exchange for leaving the money deposited for a specified period.
CECL - Current Expected Credit Loss: A standard for estimating allowances for credit losses on financial instruments over their lifetime. It requires institutions to account for expected losses based on historical, current, and forecasted information.
CET1 - Common Equity Tier 1: Measures a bank’s core equity capital compared with its total risk-weighted assets. It is a key indicator of a bank’s financial strength and stability, reflecting its ability to absorb losses.
CLTV - Combined Loan-to-Value: A financial metric that measures the ratio of all secured loans on a property to the property’s appraised value. It is calculated by dividing the total amount of all loans secured by the property by the property's appraised value. CLTV is used by lenders to assess the risk of a borrower defaulting on their loan, with a higher CLTV indicating a higher risk.
CFA - Certified Financial Analyst: The CFA Institute offers this professional credential to finance and investment professionals. It signifies expertise in investment analysis, portfolio management, and ethical standards.
CFM - Cash Flow Management: Involves managing the inflow and outflow of cash to ensure a business has adequate liquidity to meet its obligations. Effective cash flow management helps maintain financial stability and operational efficiency.
CFPB - Consumer Financial Protection Bureau: A regulatory agency that oversees financial products and services. It aims to protect consumers by enforcing laws and regulations that ensure fair and transparent financial practices.
CIF - Customer Information File: A CIF contains information about a bank customer. It is used to track transactions and manage relationships. It includes personal details, account information, and transaction history to provide comprehensive customer insights.
CRA - Community Reinvestment Act: A law designed to incentivize financial institutions to assist in fulfilling the credit requirements of the communities they serve. It promotes fair lending practices and supports economic development in underserved areas.
CTR - Currency Transaction Report: A report filed for transactions over a certain amount to prevent money laundering. Financial institutions must report transactions exceeding $10,000 to the Financial Crimes Enforcement Network (FinCEN).
CVV - Card Verification Value: A security feature for credit and debit card transactions. It is a three- or four-digit code that helps verify the card’s legitimacy and protect against fraud during online or card-not-present transactions.
CIU - Cyber Intelligence Unit: A team within a financial institution dedicated to monitoring, analyzing, and mitigating cyber threats. The CIU focuses on identifying vulnerabilities, preventing cyber-attacks, and protecting digital assets using advanced tools and techniques. It also plays a key role in incident response and safeguarding sensitive data.
DDA - Demand Deposit Account: A bank account where deposited funds can be withdrawn at any time without prior notification to the institution. It offers flexibility for daily transactions, including checks, debit card purchases, and electronic transfers.
DEI - Diversity, Equity, and Inclusion: Encompasses policies and practices that promote the fair treatment and full participation of all people. The goal is to create an inclusive workplace that values diverse perspectives and fosters equal opportunities.
DTI - Debt-to-Income Ratio: A personal finance measure that compares an individual’s monthly debt payment to their monthly gross income. Lenders use it to assess a borrower’s ability to manage monthly payments and repay debts.
EBIDA - Earnings Before Interest, Depreciation, and Amortization: A financial metric used to measure a company’s operating
performance. It is calculated by adding interest, depreciation, and
amortization back to net income. Unlike EBITDA, EBIDA does not add back taxes,
giving a slightly different view of a company’s profitability and cash flow
from operations.
EBITDA - Earnings
Before Interest, Taxes, Depreciation, and Amortization: A financial metric
used to measure a company’s overall financial performance. It is calculated by
adding back interest, taxes, depreciation, and amortization to net income.
EBITDA is frequently used as an indicator of a company’s profitability and ability
to generate cash flow from operations, excluding the effects of financing and
accounting decisions.
ECOA - Equal Credit Opportunity Act: A federal law that prohibits discrimination in credit
transactions based on race, color, religion, national origin, sex, marital
status, age, or receipt of public assistance. It requires creditors to provide
reasons for credit denial and promotes fair lending practices.
EEOC - Equal
Employment Opportunity Commission: A federal agency in the United States
tasked with upholding laws that prohibit discrimination against job applicants
or employees based on factors including race, color, religion, sex (including
pregnancy, gender identity, and sexual orientation), national origin, age (40
or older), disability, or genetic information. The EEOC investigates complaints
of discrimination, mediates disputes, and litigates cases of employment
discrimination.
EFT - Electronic Funds Transfer:
The electronic movement of money from one bank account to another. It includes direct deposits, wire transfers, and electronic bill payments. EFTs provide a convenient and efficient way to transfer funds securely.
EMV - Europay, MasterCard, and Visa: A global standard for credit card security using chip
technology. EMV cards contain embedded microchips that store and protect
cardholder data, which lowers the risk of fraud and counterfeit transactions.
EPS - Earnings Per Share: A
company’s profit divided by outstanding shares of its common stock. It is an
important indicator of a company’s profitability. Investors use it to assess
financial performance and compare it with other companies.
ERM - Enterprise Risk Management: A comprehensive approach utilized by organizations to
identify, assess, prioritize, and mitigate risks across all aspects of their
operations. It involves establishing frameworks, processes, and methodologies
to systematically manage risks that could impact the achievement of strategic
objectives. ERM aims to enhance decision-making by providing a structured way
to understand and address risks at all levels of an organization, thereby
optimizing the balance between risk and reward.
F - J
FASB - Financial
Accounting Standards Board: An independent, private-sector organization
that establishes financial accounting and reporting standards for public and
private companies and not-for-profit organizations that follow Generally
Accepted Accounting Principles (GAAP) in the United States. The FASB’s mission
is to improve the usefulness of financial reporting by setting standards that
provide clear and consistent information to investors and other users of
financial statements.
FATCA - Foreign Account Tax Compliance Act: A federal law requiring U.S. taxpayers to report
financial accounts outside the United States. It aims to combat tax evasion by
requiring foreign financial institutions to disclose information about accounts
held by U.S. taxpayers.
FDCPA - Fair Debt Collection Practices Act: A federal law limiting third-party debt collectors’
behavior and actions. It prohibits abusive, unfair, or deceptive practices and
ensures
debt collectors treat consumers fairly during the
collection process.
FDIC - Federal Deposit Insurance Corporation: A U.S. government corporation that provides deposit
insurance to U.S. commercial banks and depositors of savings institutions. It
protects depositors’ funds in the event of a bank failure and promotes public
confidence in the financial system.
FHA - Federal Housing Administration: A government agency that provides mortgage insurance
on loans made by FHA-approved lenders. The goal of the FHA is to enhance
accessibility to homeownership by providing insurance for loans that feature
reduced down payment requirements and offer greater flexibility in credit
criteria.
FICO - Fair Isaac Corporation: A company that creates credit scores used by lenders
to evaluate credit risk. FICO scores span a range of 300 to 850 based on
factors like payment history, credit utilization, and length of credit history.
FIFO - First In, First Out: An asset management and valuation method in which the
first items added to inventory are the first to be sold. It is commonly used
for inventory accounting to match older costs with current revenues.
FinCEN - Financial
Crimes Enforcement Network: An agency within the U.S. Department of the
Treasury tasked with gathering and examining data on financial transactions to
combat both domestic and international money laundering, terrorist financing,
and various other financial offenses. FinCEN’s mission is to safeguard the
financial system from illicit use and advancing national security by employing
financial authorities strategically and conducting the collection, analysis,
and distribution of financial intelligence.
FFIEC - Federal Financial Institutions Examination Council: An interagency body that prescribes uniform
principles for financial institutions. It aims to promote consistent
supervision and regulation of financial institutions across different agencies.
FOMC - Federal Open Market Committee: A branch of the Federal Reserve that decides the
direction of monetary policy. It sets key interest rates and conducts open
market operations to influence the money supply and achieve economic stability.
FRB - Federal Reserve Board: The governing body of the Federal Reserve System,
overseeing the nation’s monetary policy. It regulates and supervises banks,
conducts research, and provides financial services to the government and
institutions.
FRTB - Fundamental Review of the Trading Book: A set of rules proposed by Basel III to overhaul the
market risk framework for banking institutions. It aims to improve risk
management and capital adequacy in the trading book by introducing stricter
standards and measures.
FSA - Financial Services Authority: A regulatory body overseeing financial services. It
ensures the integrity of financial markets, protects consumers, and promotes
fair and transparent practices within the financial industry.
GA4 - Google Analytics 4: GA4,
the latest version of Google Analytics, tracks users across all devices and
platforms. It includes advanced machine learning capabilities to provide deeper
insights into user behavior and predict future actions.
GAAP - Generally Accepted Accounting Principles: GAAP are standard accounting principles used in the
U.S. They provide guidelines for financial reporting to ensure consistency,
transparency, and comparability of financial statements.
GLBA - Gramm-Leach-Bliley Act: A law that requires financial institutions to explain
their information-sharing practices to customers. It aims to protect consumer
privacy by regulating how financial institutions handle personal information.
G-SIB - Global Systemically Important Bank: G-SIBs are banks whose failure would significantly
affect the global financial system. These banks are subject to stricter
regulatory requirements to mitigate risks and ensure stability.
HELOC - Home Equity Line of Credit: A line of credit extended to a homeowner who uses the
borrower’s home as collateral. It allows a homeowner to borrow funds up to a
limit, repay them, and borrow again as needed.
HSA - Health Savings Account: A tax-advantaged account for individuals who are
covered under high-deductible health plans to save for medical expenses. All
contributions, earnings, and withdrawals for qualified medical expenses are
tax-free.
IBA - International Banking Act: A law regulating foreign banks operating in the
United States. It ensures that foreign banks adhere to the same standards and
regulations as domestic banks, promoting a level playing field.
IBAN - International Bank Account Number: A standard international numbering system for bank
accounts. It facilitates cross-border transactions by providing a unique
identifier for each account, ensuring accuracy and efficiency.
ICO - Initial Coin Offering: A type of cryptocurrency funding. Companies raise
capital by issuing tokens to investors, which can be traded or used within the
issuing company’s ecosystem.
ICARA - Internal Capital Adequacy and Risk Assessment: The process by which banks assess their overall
capital adequacy regarding their risk profile. It helps banks maintain
sufficient capital to cover potential losses and remain solvent.
IRA - Individual Retirement Account: A savings account with tax advantages that
individuals use to save money and invest for retirement. Contributions may be
tax-deductible. Earnings grow tax-deferred until withdrawn.
IRS - Internal Revenue Service: U.S. government agency that is responsible for tax
collection and tax law enforcement. It administers the federal tax system and
ensures compliance with tax laws through audits and investigations.
K - O
KPI - Key Performance Indicator: A measurable value demonstrating how effectively a
company achieves key business objectives. KPIs help organizations track
progress, identify areas for improvement, and make informed decisions.
KYC - Know Your Customer: Financial
institutions use the KYC process to verify the identity of their clients and
assess potential risks. These processes involve collecting and verifying
personal information to ensure compliance with regulations and prevent illegal
activities.
LCR - Liquidity Coverage Ratio: A requirement under Basel III to ensure banks
maintain an adequate level of high-quality liquid assets. It helps banks meet
short-term obligations and avoid liquidity crises.
LIBOR - London Interbank Offered Rate: LIBOR was a benchmark interest rate at which central
global banks lend to one another in the international interbank market. It was
widely used as a reference rate for various financial instruments. According
to www.newyorkfed.org, June 30, 2023, marked the
cessation of all USD LIBOR panel settings - the final major step in the
transition. Today, SOFR is the dominant U.S. dollar interest rate benchmark.
LIFO - Last In, First Out: An asset management and valuation method in which the
last items added to inventory are the first to be sold. It is often used for
accounting purposes to match recent costs with current revenues.
LOC - Line of Credit: A
credit facility extended by a bank or financial institution to a government,
business, or individual customer. It enables the customer to draw on the
facility when needed, up to a specified limit.
LTV - Loan to Value: A
ratio that expresses the loan amount as a percentage of the property’s
appraised value. Lenders use LTV to assess the risk of lending and determine
loan terms.
MICR - Magnetic Ink Character Recognition: A technology employed to authenticate the validity or
authenticity of physical documents, particularly checks. It uses magnetic ink
and characters to facilitate automated processing and reduce fraud.
MMDA - Money Market Deposit Account: A type of savings account that typically pays a
higher interest rate than a regular one. It provides the account holder with
limited check-writing ability and access to funds.
MRBs - Marijuana-Related Businesses: Businesses involved in the growth, distribution, and
sale of marijuana. Due to varying state and federal laws, they operate within a
complex regulatory environment.
NACHA - National Automated Clearing House Association: An organization that oversees the ACH network. It
develops rules and standards for electronic payments and ensures the efficient
and secure transfer of funds.
NCUA - National Credit Union Administration: A U.S. government agency that regulates and
supervises credit unions. It provides deposit insurance to protect members’
funds and promotes the safety and soundness of the credit union system.
NDA - Non-Disclosure Agreement: A legal contract between at two or more parties that
outlines confidential material or information that the parties wish to share
but restricts access to third parties. It helps protect sensitive information
from being disclosed.
NFC - Near Field Communication: A set of communication protocols that enable two
electronic devices to communicate with each other within a few centimeters of
proximity. It is commonly used for contactless payments and data exchange.
NINJA - No Income, No Job, and No Assets: A type of loan extended to a borrower with no ability
to pay. Due to their lack of stringent qualification requirements, these
high-risk loans contributed to the financial crisis.
NPI - Nonpublic Personal Information: Information that a consumer provides to a financial
institution that is not publicly available. It includes personal details such
as Social Security numbers, account balances, and transaction history and
requires protection and confidentiality.
NPS - Net Promoter Score: A
metric used in customer experience programs to measure customer loyalty to a
company. It is calculated based on responses to a question about the likelihood
of recommending the company to others.
NSF - Non-Sufficient Funds: A term used when an account does not have enough
money to cover a transaction. Financial institutions typically charge a fee for
NSF occurrences, and the transaction is declined.
NSFR - Net Stable Funding Ratio: A requirement under Basel III that ensures banks have
a stable funding profile in relation to their on- and off-balance sheet
activities. It promotes long-term funding stability and reduces reliance on
short-term borrowing.
OCC - Office of the Comptroller of the Currency: A U.S. Department of the Treasury bureau that
regulates and supervises national banks and federal savings associations. It
ensures that these institutions operate safely and soundly and comply with
applicable laws and regulations.
OIS - Overnight Index Swap: A type of interest rate swap. It involves the
exchange of a fixed interest rate for a floating rate, usually tied to an
overnight index, helping parties manage interest rate risk.
OFAC - Office of Foreign Assets Control: A financial intelligence and enforcement agency of
the U.S. Treasury Department. It administers and enforces economic and trade
sanctions based on U.S. foreign policy and national security goals.
P - T
PCI - Payment Card Industry: Major credit card companies set PCI standards to help
businesses protect credit card information and reduce fraud. Compliance with
PCI standards is mandatory for organizations handling credit card transactions.
PIN - Personal Identification Number: A PIN is a numeric password used to authenticate a
user to a system. It is commonly used with credit and debit cards for secure
transactions.
PITI - Principal, Interest, Taxes, Insurance: PITI represents the components of a monthly mortgage
payment. It includes the loan principal, interest, property taxes, and
homeowners insurance, providing a comprehensive view of housing costs.
POS - Point of Sale: Where
a transaction occurs, such as a checkout counter. POS systems facilitate sales,
process payments, and manage inventory, streamlining retail operations.
PPP - Paycheck Protection Program: A loan program established by the U.S. federal
government to help businesses keep their workforce employed during the COVID-19
crisis. It provides forgivable loans to cover payroll and other essential
expenses.
PPP - Public-Private Partnership: A cooperative arrangement between one or more public
and private sectors, typically of a long-term nature. It combines the strengths
of both sectors to deliver public services or infrastructure projects.
PR - Prime Rate: The
interest rate that commercial banks charge their most creditworthy customers.
It is often used as a benchmark for various lending rates, including credit
cards and loans.
PSD2 - Payment Services Directive 2: An EU regulation for electronic payment services. It
aims to increase competition, innovation, and security in the payment industry
by requiring stronger customer authentication and opening access to payment
accounts.
PSR - Payments System Risk: The risk associated with payment systems. It includes
credit, liquidity, operational, and legal risks that could affect their smooth
functioning and financial stability.
QDIA - Qualified Default Investment Alternative: AA QDIA is a default investment option for retirement
plans. It provides a safe harbor for plan sponsors by ensuring participants are
automatically invested in a diversified portfolio if they do not make an
investment choice.
QRM - Qualified Residential Mortgage: A home loan class that meets specific regulatory
standards. These standards are designed to ensure borrowers’ strong ability to
repay, promote safer lending practices, and reduce the risk of default.
RBC - Risk-Based Capital: Measures
the minimum capital appropriate for a financial institution. It considers the
riskiness of the institution’s assets and activities, ensuring sufficient
capital to absorb potential losses.
RD - Recurring Deposit: A
RD is a unique term deposit offered by banks that allows people with regular
incomes to deposit a fixed amount every month into their RD account. It earns
interest at a rate applicable to term deposits, encouraging systematic savings.
RDC - Remote Deposit Capture: A service that allows a bank customer to scan checks
and transmit scanned images to a bank for posting and clearing. It offers
convenience and faster access to funds by eliminating the need to visit a bank
branch.
REIT - Real Estate Investment Trust: A company that owns, operates, or finances
income-producing real estate. It allows investors to pool their capital to
invest in a diversified portfolio of real estate assets, often providing
regular income through dividends.
RESPA - Real Estate Settlement Procedures Act: A federal law designed to protect homebuyers by
requiring lenders, mortgage brokers, and servicers of home loans to provide
borrowers with pertinent and timely disclosures about the nature and costs of
the real estate settlement process. It also prohibits certain practices, such
as kickbacks and referral fees, that can increase the cost of settlement
services.
ROI - Return on Investment: Measures an investment’s profitability. It is
calculated by dividing the net profit by the initial investment cost, expressed
as a percentage. It indicates how effectively an investment generates profits.
ROA - Return on Assets: Measures
how profitable a company is relative to its total assets. It is calculated by
dividing net income by total assets, showing how efficiently a company utilizes
its assets to generate earnings.
ROE - Return on Equity: Measures
a company’s financial performance by dividing net income by shareholders’
equity. It indicates how effectively a company uses equity investments to
generate profits, providing insight into management’s efficiency.
RPA - Robotic Process Automation: A technology that automates routine tasks. It uses
software robots to perform repetitive and rule-based processes, improving
efficiency, accuracy, and productivity while reducing costs.
RTP - Real-Time Payments: An
instant payment system that enables immediate money transfers between bank
accounts. It offers 24/7 availability and instant confirmation, enhancing
convenience and speed for consumers and businesses.
RWA - Risk-Weighted Assets: Measures the minimum amount of capital banks must
hold by considering the riskiness of their assets. It helps banks maintain
enough capital to absorb potential losses and remain solvent.
SAR - Suspicious Activity Report: A document that financial institutions must file with
the Financial Crimes Enforcement Network (FinCEN) when they suspect that
certain transactions could be related to illegal activities. It helps
authorities detect and investigate money laundering and other financial crimes.
SBA - Small Business Administration: A U.S. government agency that supports entrepreneurs
and small businesses. It offers loans, loan guarantees, contracts, counseling
sessions, and other forms of assistance to help businesses start, grow, and
succeed.
SDN - Specially Designated Nationals: OFAC blocks SDNs, individuals and companies. Their
assets are frozen, and U.S. persons are generally prohibited from dealing with
them due to their involvement in terrorism, narcotics trafficking, or other
illegal activities.
SEC - Securities and Exchange Commission: A U.S. government agency that regulates securities
markets. It aims to protect investors, maintain fair and efficient markets, and
facilitate capital formation by enforcing securities laws and promoting
transparency.
SIFI - Systemically Important Financial Institution: Institutions whose failure could trigger a financial
crisis. They are subject to enhanced regulatory scrutiny and higher capital
requirements to mitigate risks and ensure economic stability.
SOFR - Secured Overnight Financing Rate: A benchmark interest rate for dollar-denominated
derivatives and loans. It is based on overnight transactions in the U.S.
Treasury repurchase market. It offers a transparent and reliable measure of
borrowing costs.
SOFR replaced LIBOR (London Interbank Offered Rate) as the
benchmark interest rate in many financial contracts. This transition is part of
a global effort to move away from LIBOR due to its susceptibility to
manipulation and lack of underlying transaction volume. SOFR is based on actual
transactions in the U.S. Treasury repurchase market, making it a more reliable
and transparent benchmark. The shift to SOFR aims to improve the robustness and
integrity of financial benchmarks used in various financial products and
contracts.
SRT - Significant Risk Transfer: A regulatory framework determining whether banks can
achieve capital relief through securitization. It assesses the extent to which
risk has been transferred to third parties, ensuring that banks hold adequate
capital for retained risks.
SWIFT - Society for Worldwide Interbank Financial
Telecommunication: SWIFT is a network
enabling financial institutions to send and receive information about financial
transactions. It provides secure, standardized communication for international
payments and settlements.
SWIFT Code - Society for Worldwide Interbank Financial
Telecommunication Code: A standard format of
Business Identifier Codes (BIC) approved by the International Organization for
Standardization (ISO). It uniquely identifies banks and financial institutions
globally, facilitating international wire transfers.
T&E - Travel and Entertainment: Expenses that are incurred by employees or companies
for business-related travel and entertainment. These expenses typically include
transportation, accommodation, meals, and other costs associated with
conducting business away from the primary workplace.
TARP - Troubled Asset Relief Program: The United States government’s program to purchase
toxic assets and equity from financial institutions to strengthen its financial
sector was created in response to the economic crisis of 2007-2008 to stabilize
the economy and restore confidence in the financial system.
TCF - Treating
Customers Fairly: It is a regulatory initiative aimed at ensuring that
financial institutions and intermediaries put the interests of their customers
at the heart of their business. The TCF initiative seeks to improve the culture
of financial services firms so that they consistently deliver fair outcomes to
consumers. It emphasizes the need for transparency, fairness, and clarity in
financial transactions and services.
TIN - Taxpayer Identification Number: The IRS assigns a TIN for tax purposes in the United
States. It is required to file tax returns and other IRS documents, identify
taxpayers, and process tax-related transactions.
TLAC - Total Loss-Absorbing Capacity: TLAC requirements ensure banks have sufficient
capital to absorb losses. They include equity and debt instruments that can
recapitalize a bank in distress, enhancing its resilience and reducing the
likelihood of taxpayer bailouts.
TLTRO - Targeted Long-Term Refinancing Operations: A policy tool central banks use to provide long-term
loans to banks at attractive conditions. They aim to enhance credit creation in
the private sector by encouraging banks to lend to businesses and households.
TILA - Truth in Lending Act: A federal law enacted to promote the informed use of
consumer credit by requiring disclosures about its terms and costs. It ensures
consumers receive clear and accurate information about the actual cost of
credit, helping them compare and make better credit decisions.
TMS - Treasury Management System: Software for managing an organization’s financial
operations. It helps companies manage liquidity, cash flow, investments, and
risk, optimizing the use of economic resources and improving financial
efficiency.
TRID - TILA-RESPA
Integrated Disclosure: A regulation by the Consumer Financial Protection
Bureau (CFPB) that merges the disclosure requirements of the Truth in Lending
Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). TRID
simplifies the mortgage process by using two forms: the Loan Estimate and the
Closing Disclosure. The Loan Estimate outlines key loan terms and costs, while
the Closing Disclosure details the final loan terms and costs.
U - Z
UBPR - Uniform Bank Performance Report: A report provided by the Federal Financial
Institutions Examination Council (FFIEC) that shows individual banks’
performance and risk profile. It helps regulators, analysts, and bankers assess
and compare a bank’s financial health with peers.
UDAAP - Unfair, Deceptive, or Abusive Acts or Practices: Refers to unfair, deceptive, or abusive practices in
consumer finance. The Dodd-Frank Act prohibits these practices to protect
consumers from financial harm and ensure fair treatment.
USDA - United States Department of Agriculture: The U.S. federal executive department responsible for
developing and executing federal laws related to farming, forestry, rural
economic development, and food. It aims to support farmers, promote
agricultural trade, ensure food safety, and improve rural communities.
VA - Veterans Affairs: The
government-run military veteran benefit system with Cabinet-level status. It
provides comprehensive healthcare, benefits, and support services to U.S.
military veterans and their families.
VAR - Value at Risk: A
statistical technique used to measure the risk of loss. It estimates the
maximum potential loss over a specific period with a given confidence level,
helping financial institutions manage risk and make informed investment
decisions.
VC - Venture Capital: A
form of private equity and financing investors provide to startups and small
businesses. It supports early-stage companies with high growth potential,
typically in exchange for equity ownership.
VISA - Visa International Service Association: A global payments technology company that facilitates
electronic funds transfers worldwide, primarily through credit, debit, and
prepaid cards. It connects consumers, businesses, financial institutions, and
governments.
W-2 - Wage and Tax Statement: An IRS form used to report wages paid to employees
and the taxes withheld. Employers provide it to employees and the IRS annually,
summarizing earnings and tax information for the year.
W-8 - Certificate of Foreign Status of Beneficial Owner for
United States Tax Withholding: An
IRS form used by foreign individuals and entities to certify their status. It
exempts them from specific U.S. tax withholding requirements on income from
U.S. sources.
W-9 - Request for Taxpayer Identification Number and
Certification: A form used in the
United States to request a taxpayer identification number and certification.
Businesses typically use it to collect tax identification information from
contractors, vendors, and other entities for tax reporting purposes.
WACC - Weighted Average Cost of Capital: A calculation of a firm’s cost of capital in which
each category of capital is proportionately weighted. It represents the average
rate of return a company is expected to pay its security holders, providing
insight into its financial health and investment potential.
YTM - Yield to Maturity: The
return expected on a bond if held until it matures. It accounts for the bond’s
current market price, coupon interest rate, par value and time to maturity,
offering a comprehensive measure of its profitability.
ZBA - Zero Balance Account: A checking account that maintains a zero balance by
automatically transferring funds from a master account in an amount large
enough to cover the checks presented. It helps organizations manage cash flow
efficiently and reduce idle balances.
XBRL - eXtensible Business Reporting Language: A standard for exchanging business information. It
enables the efficient, accurate, and automated exchange of financial data
across different systems and organizations, enhancing transparency and
comparability in financial reporting.
0 - 10
401(k) - A retirement savings plan: Many employers in the United States offer a retirement
savings plan. 403(k)s allow employees to save and invest a portion of their
paycheck before taxes are taken out. The employer often matches contributions,
and the money grows tax-deferred until retirement.
Disclaimer
Some of the content in this blog post has been generated by artificial intelligence (AI) and has been reviewed and edited by the author for accuracy and clarity. The information provided is intended for educational and informational purposes only.
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