What are the different types of financial institutions?
The differences in banking entities result from a combination of history and politics. For example, depending upon the type of bank it may be regulated and supervised by different federal and/or state agencies. While each of the banks may seem similar, they enjoy different rights, have different powers and obligations, and may have different tax obligations:
Savings and loans are required to invest more of their assets in mortgages than banks.
Trust companies manage and administer trust funds of individuals and pension plans, but do not take deposits.
Credit unions have some unique tax advantages.
Some entities have powers to sell other products, such as insurance; directly or through subsidiaries; some do not. Some have to place significant reserves on deposit with the government; others do not. Some have different deposit insurance arrangements.