Developing an understanding of banking, particularly lending practices, can be difficult for many students. Fortunately, there are some great Internet resources to help students learn about banking including two videos that I recently learned about through TEA (The English Adventure).
The Crisis of Credit Visualized is a two part video series explaining how lending practices and mortgages in particular contributed to the cause of our current economic situation.
Applications for Education
These videos are probably too advanced for use in elementary schools, but could certainly be used in middle school and high school classrooms as part of a unit on economics.
Here are three other video resources that you might also consider using as part of a lesson on economics.
Saving Money in Plain English
Understanding the Financial Crisis - Say It Visually
The History of Credit Cards in the United States