Alternative financial services (AFS) – Financial services offered by providers that are not banks; such services include check-cashing outlets, money transmitters, car title lenders, payday loan stores, pawnshops, and rent-to-own stores.
Annual percentage rate (APR) – The percentage cost of credit (including the loan amount and fees) on an annual basis.
Bounced check – A check that is written on a checking account, submitted for payment, and returned because the account does not have enough funds to cover the amount of the check.
Collateral – Property required by a lender and offered by a borrower as a guarantee of payment on a loan. Also, a borrower’s savings, investments, or the value of the asset purchased that can be seized if the borrower fails to repay a debt.
Consumer Financial Protection Bureau (CFPB) – An independent agency of the United States government responsible for consumer protection in financial businesses including banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors, and other financial companies operating in the United States.
Cooling-off period – An interval of time during which no action of a specific type can be taken.
Credit score – A number based on information in a credit report that indicates a person’s credit risk.
Direct deposit – An electronic transaction in which money is deposited directly into a payee’s bank account from a payer’s bank account.
Educational attainment – Level of education a student completes (high school, college, graduate school).
Fees – Money charged to service an account.
Installment payments – A series of payments, usually of the same amount, to pay off a financial obligation.
Interest rate – The percentage of the amount of a loan that is charged for a loan. Also, the percentage paid on a
Loan sequence – An initial payday loan and all subsequent renewal loans until the loan is paid off.
Median – The value in an ordered set of values below and above which there is an equal number of values; the number that divides numerically ordered data into two equal halves; the middle number of a set of numbers.
Overdraft – The result of an account holder authorizing a withdrawal through a check, ATM withdrawal, debit card purchase, or electronic payment when the account does not have enough money to cover the transaction.
Overdraft fee – The penalty associated with an overdraft.
Public assistance – Federal aid, benefits, or funds given to individuals on the basis of need; government benefits.
Storefront – A designated space where customers can purchase goods or services in person from a business.
Underbanked – Consumers or businesses that have limited or poor access to primary financial services provided by banks and rely on alternative financial services.
Usury – The charging of interest in excess of that allowed by law.