SAVINGS AND LOANASSOCIATION

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FEDERALRESERVEBANK

MUTUALSAVINGSBANK

CREDIT UNION

FEDERAL RESERVE BANK OF NEW YORK

'We've pet/vexep au oc//*

wterzece n? r*/e pft/s, **&rap Pet' <?iv/v£jes jmv£ /WPUS. M?>v, W£'0 MfTT&M/?e~r0S/7' r*/e M0s/ey //voc/# c#e~CK//v6 Jcc0u/sr.

WgLCOMe To rue BANK,THIS IS A c&MMmwetAiwhich Atf/W« we rxK£

AA/P MAKSf 1.&AAIS(M0tW0ilA0& AA/P &US>,

IN 2006, ABOUT SOBILLION CHECK? WEREWRITTEN. THAT€ ANAVERAGE OF MORE THAN02 MILLION CHECKS EACHANP EVERY PAY.

UEY, BUT DOH'r FOR&ET,we have t<=> tsAve A40fiv£-y//v oat* aoc-oua/t 0&f=c'/?£-YOU W/tirE- A CUE-OK. //=we oo/s/'t, we'z.L. ua\/£- ^

THAT Af£A/VS THE C»ECt<>W/i-L BE- WC»?THi-E£>ZAa/O »&OUA/C&," Afi/0THE &AMX W/Ci. &**/&*!US, A /¥^if/.

you WAVE tc* e>&/?£&PoyVS/&L£r

/<** Y&U'&E &0/W& TOC/SE A C-UE-C-K/M&

Acc&uMr.

'Amp tub owweR. oe TheCOMPUTER. STOPS WILL.0E UNNAPPy WHEN HEPINO-S OUT WE- PONTNAVE eNOU&U MONEY//V OUP7 ACCOUNT TOCOVE* THE CHECK.

OP WE CAN GET MONEYOUT Op OOP ACCOUNT ATANAUTOMATE? TGLLEP MACHINE-(ATM), EVEN WHEN TH&

WHETHER ytDU CASH A CHECK OR WlTH0RA\NMONEY AT A TELL.EP& WlNOOW OR ATM, YOu'PECONVEPTINO CHeCKING AND SAVINGS,^ACCOUNT POLLARS /NTO PAPEP CuPPENCY^^ANP COIN. ~^_ ^^^**S

** <*»!

0mkf/M

Boy, nick, it ee&le, Goopto get out oe thatstupey account.

AT LEA&T ICAN PEST IN THE-\VAULT, 0ILt-.WHEN\I'M OUTSlOe- THESank, i alwayspeel totally.SP>SNT.

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A/o. yve l&np ir to /npivipuacs, anp Businesses,,except for 7ve amount we're R*£g?u/rep Byrue- pepeRAu /rese/rve 70 set asioe as.

WHats theFBPBRAL f?BS£RV£?

THE COUNTRY'S CENTRAL BANK, CREATEP BYGOA/GR&SSIN 1913 TO ENSUR'B- THAT TPEPE IS ENOUGH MONE-yANP CREPtT /N THE COUNTRY TO PROVIP& FOFfeCONOMIC GROWTH. THE F£D HAS 12. PlSTPfOTS ANP A30ARP OF GOVERNORS IN WA&.UINGT0N P.C THEF^EPERAL fTES^RVE HAS A NUNf&ER Of=-RESPONSlBlLITlES, INCLUDING MAYING SURE PRICESAPE S.TABL£- ANP TEi-LISVG 0ANKS TO SET- AS/PErA CERTAIAJ PORT/ON OF* THE/P PEPOSITS ASf?E~&£-R?V£S>, EITHER AS CASH IN THEIR VAULTS OP INACCOUNTS AT A REPEPSAL RESERVE- BAA/K .

THAT N1EANS> THAT /F ABANK MAS A RESERVEREQUIREMENT OF-to percent:..

it mus;SETA&IPE4I/N RESERVEpop EVERY

A /O PERCENT RESERVE REQUlREMENTMEAA/& >OUR LAA/PC.ORPS BASJK COULP LENDup to 9o pepcea/t op r«e $5~,oao, op44,500, to the ownep? op the f/zzAPARLOR a/ekt poop: so pe cam pat

for p/s. n&w KircueN.

& G©0Me&[3/fH£ v\r

the Pizza paplor o&a/er w/ll G/ve?the constpuct/om ccwipaa/y am4lso0 check, amd the heap opthe coa/struct/oa/ compaa/y wllpepo&it /t /a/ p/s 0aa/k pown

the street.

W/TH A /O PERCENT PE&eRVG REOU/REA4E/VT,THE COA/STPUCT/OA/ COMPAAtylS &AA/K POVSA/THE STREET COULD l^EA/P UP TO <?0 PERCEA/TOP THE 44500, OR 4 V,OSD, 72> THE OWAdEROP THE A40V/E TREATER A^A*OSS

THE OWA/EP OP THE PIOWE THEATER W/CJ. PEPOS/T TRES Y,OSO CHECK /A/ TH/S 0AA/K . AA/O, WITH A fO PERCEA/TPE&ERVE PTE~QU/REAslEA/T, Ix/ECAA/ LEAVP UR TOQO PERCEA/T OE $ 4,OSO, OR $ 3,6¥^ 70 TRE"OWA/EP? OP THE 0OOK ST0RE; So SHE c-A/V

0L/y A/£W 3O0*C*

.

W/T/S As-/ OfZ/G/A/AL. ttBF&&/-r ©/= $ S,CCO AMD S/J&T T/SRee 77*AA/£ACT/&V£,THP.BG BAA/K& GOT 4 /2>,5SC> /A/ A&tV 0£f*&tTS AA/O A^bejf/2,/9^/as coaas-s. A U37- of=- /*toA/ey ss c/*eAT&& wmea/ -rue- BtAAS^s.<Z#ep>/T <UAS/&/V&, AA/C SAv/A/GS, AVP COAASS. /A/ THE 1

C/fiS/re-P S79472£S <ser /a/wol-ved .

/p So aujcjs op r//eA4ew&y P£f=i?£,/r£C>eers l&astout, i&wix? we ka/cw t/satrue baa/a: iy/lc BeAece re &/ye u&ac/p ajoa/ey &ac*Ah*/£A/ we~wawt /rP

&AA/P& TPy 7t> A4AKB SAPe i-*WS,A/t, «»/= <^ouf<se , r//£7?£'j=.ALWAYS, fif/Ste. /S4/VXS ASA\AECAPSTAS- 7& PROTECT 7?/£MS>e/.ves>AGA/A/ST t~£>&&, AA/P A^EOe^A/- AA/CS-TATe P"G&Ut-ATOA*£, EXAArf/ASE&AASKS 7D A4AKE £>CJf?£ T/SEy AKEEA/GAG/ASG /AS SA&& AA/C

SOC/A/t? PPACT/CE5.

•rCH/fff; /Ay a/ot

<E>£TT/ASG A POLSe ..

/ KA/EVS /r WAS, &ICHw«sv we exAM/A/ep ir la&tYEAR . /'AA GO/ASG TORECOMMEND AA/ /A/eas/£tASOP CAPITAL. .

PUSS,, P£F*ds.iT& ARE/AJSl//?£t? ay tPE FePCRAL.Pepc&/r /a/^uraavce corp

aa/ agea/cy g>p ta/eG>0\/ef?A/AA£,fSir- .

ftT/SE&AA/K 0I0A/T SuPV/VS-

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&JT C&A/T PAAS/C, Wg

W/SAT SROUt-D W£ CO /PWe WAAs/T TO SeT S&/WCA^oA/ey As/ce so we caa/START PPOPUC/ASG 0TA/ERsa/a<=./k& &esices.Pf*GrTZeL& P.

^s-77/AT!s A GCXX><$ues>T/OA/, rrtAHc/SGo,

THE S4V//V6S ACCOUNTS RA^/GGfrom PASSBOOK &AV/A/&S aozountsTHAT AL^owFREQUENT MTHPRAWACS&ur &o>y RELAT/VELy tc>W AAFBA ,

to GGxrtr/cATe op- p*p&s/r (cc)ACCOUNTS THAT RHy //A6HEKabates our T/e ur youR AiaNEyA=OR AS wttle as seven C**Y»or as ljong As /o years .

/'M HEAD/NG TOTHE &GACU ROA?THE- WEEKEND,WANT TO GOME?

'SOUNDS L./KE?*PUN, &UT /WAVE 727 PASS. .

/'/* GO/sAG TD SE|

T/EP UP A&RT»e NEXTSO YEAR'S. .

be^

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OR you MAY PREFER AN /AfTEREST -

&EAR/NG CHECk/NG ACCOUNT,SUCHas. a A/eeor/ABf-E oppep <£>/<=

w/tuprawal (a/0in) account".a/ow Accounts allow unl/m/tec<zheca( wp/t/ng but l/sual-lypeocj/re a man/mum balance /nopper 7© earn /nterest.&aa/rs also opa=er a40asg-yMAPKET PEAVS/T AusouNTSfMMCA*)WHICH Of:/=&f* C/M/7EP> CMSJXWAT/T/AVG AND OETEA/ PEGU/PEA M/NIMuM AVERAGE 0ALAA/CE-TO AVO/O MCWTHLy iCHAPGES.

t'M NOT SURG WECAN MA'NTA/AJ AArt/N/MUM EACANCE PASSAT A/OW, So/ tn/a/r we spoul-c start o***=

w'tn a a7ex3ulaa? sav/aagsaccount: we'll, st/ll. gapsv _,

AAATEREST. P/O/v'7- WE" g^CAN &AAJR ON tr,

EVELYA/, AND yoU'Ct,GARAV /NTERGST BOTHON THE OPKB/NAL.AMOUNT >OU PEPPS/T /NTHE ACCOUNT ANP ON ANy/NTERGST >OU'VE ALREA£>yGAR/VE-P AND LEAT /A/,THE ACCOUNT . TV/ATSCZALL.ED COA4POUAA&

IP we MAve jH^ogoAND PUT IT IN ANACCOUNT P'AYINOS PEPceNT COMPOUND

i

/NTexe&T, in Pive-

MANY BANKS) A.L.SOI-&S.UE CJZBP/T <ZAA*P£ ,•SO YOU czAN Buy T~NC-C.OMpaT£K YOUmentioned 7&c>AyANO PAY pOf* I7~

\nitu a cJtG&rr <zAf<c? , weWOULDN'T HAVB TO f?AyTHE ENT/&E- &IL.L- 47" CWCM./NST£AD, we COUL-D

SPP£AD eat? PHYMC/vTS outoi^R MAW MONTHS ASUoNS AS we A&tGB TOPay 7X/& ban* /NT/s'Resr.Bxrr that /Nrepesrradps.r& out* TtrTAt. tf»S7" «>^=

o*snin& T»e GoMPure*.0ai rue- or^ex hand,we'p &£T r*& czcvApmreA:

WELL, I DOnY WANT TO GO INTOP&BT PI&HT /YOW AND f/SAf &*/NeS*&ADDL.&D INITt/ MONTHLY PAYMENTSWe'Pe- NOT P£ADY Pop! THATRC-&P>ON&/BH-rTY . / 77V//VA- l-v5»

•&UOUUIP 3TltZ/< TK- T/-IB- CfjeCK/NG,AND SAY'/N&S, ACUZOUNT-&, ANOTM/NK ABOUT TNEr OT7-/£PZ

K Bank se-ftvtc.es> LA-re*.

PART TWO - THREE YEARS LATER,

<S£7-77/ve MOltS opoeps, popoc/p PRETzeijs, sveky c>Ay. D

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WAIT U/VTIL. YOU TRY OZ*»oe/w/Y's i.AT£&r/A/versr/oNS

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YGAH, PAPSA//P YUCCA., &wg£T"potato, tapo , batata , aiu. K/nos.op- exor/c veeeTAex-es app /r*THAT S>0^yt- OA* C-H/PB . /'A*

rH&se-P /fa suae ou/?CU£>TO/vi£R£> Mt-L. AVM/V7"TO Bay TH£M FOR7-UE/f* STOKES, .

/'LL PI&URE OUT HOW MUCH IT'LLCOST 7D EXPAND, MAKE copies

OF OUR FINANCIAL STATEMENTS,ANO WRITE A 0U&I/VES& AMP

MARKETING FLAM.THEN WE'LL. MAKE ANAPPOINTMENT IV/TH

A4F- &AA/KS .

TflySOME OPOUR GREAT /VEWEXOT/C CHIPS, A1R.BAA/KS.*£&£&? TO GETALOAAt 7t>CXPANO OUR eU&Ne&S aa/O

//MMMM. tuese are &ood. butyOCt A LOAN, /'/M EO/N& TO f^KVETp-ASK ytXJ TO FILL OUT ANAPPUCAT/ON, So we c^A/ Do ACREDITCHECK

.

/'ye heardOP THE

k"vTt3 USE THE MOA/Ey TO

THE TH/fiD C /s eox COLLATERAL .WHAT CAN \t*E USE 7Z>

Gt/ARAA/TEE THE LOAN //vCASE yoWGE UNA&i-E TO

in that cas.b, we would use theEQUIPMENT AS. >OUR COLLATERAL.AND IT COULD BE TAKEN OVEP BY

THE BANK IF- YOU FAILEDto repay us.

Remember, when you take out aLOAA/, ITS A t-E&AL. CONTRACT.

Th/S hAV, BOYSWE'RE &OIN6 TOhave TO AUCT/ON

rr off-.

¥

THE FoupTH C IS FOR CAPITAL,THE AMOUNT OF MONEY YOU HAVE/NYESTEP IN )CHP 3US//VE*SS>

.

THE 3ANK ALWAYS kVA/VTSA BoPPOWERTO NAVS SOME OF HIS OR HEPiCAPITAL /A/VESTED , /V07~ SU&T

THE B-ANK'S MO/VEY.

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WE OWN ALL OUPPRETZEL-MAKlNGrEQUIPMENT

AND WE'VE SAVEDENOU&H 7© PAy FOPhalf the casrorTHE CM/P-MAK/N&

^MACHINE.

AiC

r77^47"

SOUNDSREASONABLE

'

T̂HE FIFTH C IS FOPCONDfT/ONS, or

ECONOMIC FACTCPS THAT dMI&UT AFFECT yOUPBUSINESS

.

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I'D LOVE TORAY OFF THE- LOAN,MP. BANKS, BUT ICANT BECAUSE OF THIS\DARN RECESStON. lots)OF PEOPLE APE OUTOF l>YOPK OP F^E-EL.SQUEEZEDFINANCJALL.Y.

^*3S\ i

LONG-TERM LOAMS areA &eger GAM&LE&ECAUSE A COT CANCHANGE intO YEARS.

/ GUES& ITWAS A MISTAKEBORROWING

SOMUCH MONEY/O YEARS AGOTO START/MAKINGrecordplayers^

HOW COULD'WE HAVE KNOWN

THEY WEREGOING TO

/A/lsEA/TCOMPACTd/scst

wggi

AMD. THE DEMAND FOR MONEY/N RELATION 70 THE AMOUNT OFAtONEY AVAILABLE POP. LENDING^ALSO DETERMINES/NTEREST RATES-

A LOT OF PEOPLE WANT'70 BORROW, BUT THEfSE

'ARENT MANY OFUS HERE.QCON THEY'LL RAVE TO

,

PAY A HIGHER RATEOF INTEREST^

&THER STAY HEREl/P / LEAVE YOUf'LL BE "A LOAN.

V

GET IT?*

?$%££

5

Who determines the AMOUNTOF MONEY BANtGS,HAVE TO L£NO\^

WELL,TO SOME EXTENT,lT!S THE PEOPLE

AND BUSINESSES TTlATPEPOStT THE MONEYthat the bank lendsout. and to someextent, its theborrowers whoseloans take money

THE BANK.

THE FEDERAL RESERVE ALSO FLAROLE BECAUSE IT SETS RESERVEREQUIREMENTS AND , AS A PESULTDETERMINES THE SHARE OF THEDEPOSITS THAT CANBE LENTOUT.

AYS A ]RVE JSULT,^dheJ^^A

the feds actions INFLUENCE the money supply,INTEREST RATES, AND THUS. THE PLANS OF-&US/NESSES AND INDIVIDUALS To SAVE AND BORROW.

WHAT ABOUT IT, MR BANKS ? MLL.YOU HELP OUR BUSINESS BYRECOMMENDING,OUR LOANP _ Wu MUST THINK'

OUR PRODUCT ISPPETTK GOOD.

yOU ATE THIS WHOLEBOIVL AND DIDN'T evENlSet aside ANyRESERVES.

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J 'm f**-*

/'M NOT PROMISING, ANYTHING, BUTyou rave BEeyv good customers),FOR THE: LAST THREE YEARS ANDyt>U HAVE A &OOP SNACK... ERKP.,1I N1EA/V TRACK... RECORD.WE'LL. TAKE A LOOK AT YOURAPPLICATION AND BUS/AIESSPLAN AND LET VOU KNOW

.

-

OOOOH./ ATE-

SOAAANYCRIPS

,

A/OtV ITHINK /'MOVERFED.

APPLICATION

21,

tr sure uas>.~

De/v/vyLOST RtS HAIR.

BOUGHT A CARAMD OPENED A

CHECKING ACCOUNT.WA/VO WE ALL STARTED

WEARING SUITSTO WORK

EVERYDAY .

BESIDES THAT, WE'RE ONE OF THELARGEST SMACK PRODUCERS /NTHE WORL.D , AVD WE CX&0RTTO CCX/NTR/£S ON RIVE?CONTINENTS .

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AND WE'RE GETTING CHARGEDTHE "^RM4^*RAT£ ON OUR LOANS,,THE INTEREST RATE BANKSCHARGE TNE/R MOST

CREDIT-WORTHY CUSTOMERS .

.///.<r Tu/fiiis aos-ii rrX" DCAACAAC1C G> it/I IC AJ nrtir\\

THROU&H OUR COMPUTER L/NKTO THE BANK, WE CANTRANSFER FUNDS ELECT&ON/CAUYFROM OUR ACCOUNT TO

ACCOUNTS AT OTHER 0AA//CS .

The bank defos/ts our EMFLor£E&\WAGES ELECTRONICALLY /NTO THEIR \ACCOUNTS AT OTHER BANKS, SoTHEY OQN'T HAVE TO STAND ON U/N& JTO DEFOS/T Tf-IE/R PAYCHECKS .^^

2 3.

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Public Information Department

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www.newyorkfed.org

To order publications online, go to:

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2008