Glossary - P

A community for which the Federal Emergency Management Agency (FEMA) has authorized the sale of flood insurance under the National Flood Insurance Program (NFIP).

A book in ledger form in which are recorded all deposits, withdrawals, and earnings of a member's savings account.

Any note or other time instrument of indebtedness that has not been paid on the due date.

A small-dollar, short-term loan that a borrower promises to repay out of their next paycheck or deposit of funds. Payday loans generally charge high fees and interest.

The person or organization to whom a check, draft, or note is made payable.

The date on which a loan or installment payment is due. It is set by the financial institution and disclosed on your original loan note. Any payment received after this date is considered late and fees and penalties may be assessed.

The complete repayment of a loan, including principal, interest, and any other amounts due. Payoff occurs either over the full term of the loan or through prepayments.

A formal statement prepared when a loan payoff is contemplated. It shows the status of the loan account, all sums due, and the daily rate of interest.

The person or organization who pays.

How a credit union compares to a group of federally insured credit unions of similar asset size.

How a credit union ranks in relation to the federally insured credit unions in its peer group in key area of financial performance. For example, a ranking of 75 means 25 percent of all federally insured credit unions in the peer group have the same or higher ratios and 75 percent have lower ratios.

The interest rate described in relation to a specific amount of time. The monthly periodic rate, for example, is the cost of credit per month; the daily periodic rate is the cost of credit per day.

The billing summary produced and mailed at specified intervals, usually monthly.

Generally, a four-character number or word, the PIN is the secret code given to credit or debit cardholders enabling them to access their accounts. The code is either randomly assigned by the financial institution or selected by the consumer. It is intended to prevent unauthorized use of the card while accessing a financial service terminal.

When internet fraudsters impersonate a business in an attempt to trick you into giving out your personal information, such as usernames, passwords, and credit card details. Legitimate businesses do not ask you to send sensitive information through insecure channels.

1) The location at which a transaction takes place. 2) Systems that allow consumers to effect transfers of funds from their deposit accounts and other financial transactions at retail establishments.

One point is equal to 1 percent of the principal amount of a mortgage loan. For example, if a mortgage is $200,000, one point equals $2,000. Lenders frequently charge points in both fixed-rate and adjustable-rate mortgages to cover loan origination costs or to provide additional compensation to the lender or broker. Points are paid usually on the loan closing date and may be paid by the borrower or the home seller, or split between the two parties. In some cases, the money needed to pay points can be borrowed, but increases the loan amount and the total costs. Discount points (sometimes called discount fees) are points that the borrower voluntarily chooses to pay in return for a lower interest rate.

A written instrument that authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Some institutions require that you use the financial institution's power of attorney forms. (The financial institution may refer to this as a Durable Power of Attorney: The principal grants specific rights to the agent.)

An EFT authorized in advance to recur at substantially regular intervals.

A system established by a written agreement under which a financial institution is authorized by the customer to debit the customer’s account in order to pay bills or make loan payments.

A policy that offers fixed combinations of building/contents coverage or contents-only coverage at modest, fixed premiums. The PRP generally is available for property located in B, C, and X Zones in Regular Program Communities that meets eligibility requirements based on the property’s flood loss history.

The payment of a debt before it actually becomes due.

A clause in a mortgage allowing the mortgagor to pay off part or all of the unpaid debt before it becomes due.

A penalty imposed on a borrower for repaying the loan before its due date. (In the case of a mortgage, this applies when there is not a prepayment clause in the mortgage note to offset the penalty.)

The account balance as of the previous billing statement.

The outstanding balance on a loan, excluding interest and fees.

Protects the lender against a loss if a borrower defaults on the loan. It is a payment usually required of a borrower for loans in which a down payment is less than 20 percent of the sales price, or in a refinancing, when the amount financed is greater than 80 percent of the appraised value. When you acquire 20 percent equity in your home, PMI is cancelled. Depending on the size of your mortgage and down payment, these premiums can add $100 to $200 per month or more to your payments.