|Due By (Pacific Time)||11/20/2016 11:00 pm|
Discussion response/reply to 2 original post. 1/2 page per topic....APA format. Maximum of 1 page.
In responding to the learning activities and to other students, please be sure to use the course material using in-text citations and a reference list to cite the source(s) used.
(1) Discussion Post to Respond to (JH)
After reading the 3 topics, I come to a conclusion that Whalebone Café and PayPal isn’t a bank, due to not offer deposits insurance to customer who keeps money in their accounts, it does not have the regulatory cost of being a bank. Banks accept deposit from customer, raise capital from investor or lender, and then use that money to make loans, buy securities and provide other financial services.
In the case of Whalebone café, Mr. Clay accepts deposit, pays interest in the form of products from his shop and loans the money to customer with a small fee. It has the idea of a bank, however it is not, because it is not regulated and insured, it can not even use the word bank as part of its trade name. PayPal has many accounts, which customers can leave their money into their online account without earning any interest and is ready to spend. Even though PayPal offer credit cards and loans, it still not a bank due not have a banking charter.
Both companies above have a high risk, for a couple of reasons; First, deposits aren’t insured by FDIC. Also they do not comply with Patriot Act identity verification; there are many other regulations and laws that make a simple checking account a bank to be less risky than PayPal and Whalebone café.
(2) Discussion Post to Respond to (CT)
No, it is not a bank although it have some functions of a bank. The Pennsylvania state banking officials determined the Ice Cream Parlor no longer could advertise as a bank and must remove bank from his company's name. The law in Pennsylvania permits private citizens to function as a bank providing they do not advertise as a bank. The law requires a banker to have a license or charter before they can advertise as a bank. The penalty for violating the banking law is to lose your banking license. Since the Ice Cream Parlor didn't have a license it is impossible for the state to penalize for banking violations. The bankers are also required to have FDIC Federal Deposit Insurance Corporation an insurance to protect the depositors in case the bank fails. The Ice Cream Parlor have no insurance to protect it depositors. The bank pay interest on deposits via gift cards that can only be redeemed in the store. No protection. The Ice Cream Parlor lend money but have a secure way to collect if borrow defaults.
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