Financing Companies, and Building and Loan

• Financing companies are corporations, excluding banks, investment houses, and other financial institutions, primarily organized for extending credit facilities to consumers and enterprises through direct lending, discounting, factoring, buying and selling contracts, and financial leasing of property.
• Credit refers to various financial instruments such as loans, mortgages, financial leases, deeds of trust, advances, conditional sales contracts, and contracts for property or services. It includes claims against property or money, purchases, and other transactions with similar purpose of effect.
• Financial Leasing is a credit extension method where the lessor buys or acquires property for the lessee, with periodic payments to amortize 70% of the purchase price or acquisition cost. The Lessee has two years to use the property, expense lease rentals, and bear costs of repairs, maintenance, insurance, and preservation, without any obligation to purchase the property at the end.
• Purchase Discount is the difference between the value of a receivable and the net amount paid by the finance company, excluding fees, services, charges, and interest. Lease rentals shall refer to periodic payments made by the lessee to the lessor.
• Republic Act No. 8556 is an Act Amending Republic Act No. 5980, as Amended, Otherwise Known as “The Financing Company Act of 1998”
• A loan association is a financial institution that provides loans to its members, who typically have a common bond or connection. These associations play a crucial role in the economy by promoting financial inclusion and providing access to credit for individuals and small businesses.
• Building and Loan Associations, also known as thrift institutions, are financial institutions that serve communities by offering various financial services. Their purpose is to provide accessible and affordable banking services to individuals and businesses, promoting financial stability and community development.
• Building and Loan Associations have a rich history dating back to the 19th century. They originated as cooperative organizations formed by individuals pooling their savings to provide affordable loans for home purchases. Over time, these associations evolved to offer a wider range of financial products and services to meet the changing needs of communities.
• Building and Loan Associations actively contribute to community development by supporting local initiatives and investing in neighborhood projects. They collaborate with community organizations, government agencies, and businesses to address social and economic challenges, promote homeownership, and improve the overall wellbeing of the community.
• TYPES OF BUILDING AND LOAN ASSOCIATIONS: Savings and Loan Associations, Credit Unions, Mutual Savings Banks, and Cooperative Banks.
• Savings and Loan Associations primarily focus on providing mortgage loans to individuals and businesses. They gather deposits from savers and use those funds to offer competitive mortgage rates, helping people achieve their dreams of homeownership.
• Credit Unions are member-owned financial cooperatives that offer a wide range of banking services. They are often formed by individuals with a common bond, such as belonging to the same community, workplace, or organization. Credit Unions prioritize the financial well-being of their members and are known for their personalized service and competitive interest rates.
• Mutual Savings Banks are communityoriented institutions that are owned by their depositors. They offer a variety of banking services, including mortgage loans, savings accounts, and personal loans. Profits generated by these banks are reinvested in the community to support local development.
• Cooperative Banks are owned and operated by their customers. They provide a range of financial services, including savings accounts, loans, and investment options. Cooperative Banks prioritize the needs of their members and often have a strong focus on community development and social responsibility.