Consumer Credit Regulation: 12 U.S.C. § 36. Branch banks
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(f) Law applicable to interstate branching operations
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(2) Treatment of branch as bank
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(f) Law applicable to interstate branching operations
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(2) Treatment of branch as bank
Any association may take, receive, reserve, and charge on any loan or discount made, or upon any notes, bills of exchange, or other evidences of debt, interest at the rate allowed by the laws of the State, Territory, or District where the bank is located, or at a rate of 1 per centum in excess of the discount rate on ninety-day commercial paper in effect at the Federal reserve bank in the Federal reserve district where the bank is located, whichever may be the greater, and no more, except that where by the laws of any State a different rate is limited for banks organized under State laws,
The taking, receiving, reserving, or charging a rate of interest greater than is allowed by section 85 of this title, when knowingly done, shall be deemed a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or which has been agreed to be paid thereon.
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(j) Activities of branches of out-of-State banks
(1) Application of host State law
(a) Definition. The term “interest” as used in 12 U.S.C. 85 includes any payment compensating a creditor or prospective creditor for an extension of credit, making available of a line of credit, or any default or breach by a borrower of a condition upon which credit was extended.
A national bank shall not be considered located in a State solely because it physically maintains technology, such as a server or automated loan center, in that state, or because the bank’s products or services are accessed through electronic means by customers located in the state.
For purposes of 12 U.S.C. 85, the main office of a national bank that operates exclusively through the Internet is the office identified by the bank under 12 U.S.C. 22(Second) or as relocated under 12 U.S.C. 30 or other appropriate authority.
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(a) Definition. The term “interest” as used in 12 U.S.C. 1463(g) includes any payment compensating a creditor or prospective creditor for an extension of credit, making available of a line of credit, or any default or breach by a borrower of a condition upon which credit was extended. It includes, among other things, the following fees connected with credit extension or availability: numerical periodic rates, late fees, not sufficient funds (NSF) fees, overlimit fees, annual fees, cash advance fees, and membership fees.
The full text of these letters is available online as companion material to this treatise.
Interpretive Letter No. 1100 (May 5, 2008). An operating subsidiary is entitled to use the interest rate permitted by its parent bank’s home state where the subsidiary does not conduct any business in that home state and where approval of the loans does not occur at any branch of the bank.
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(g) Preemption of State usury laws
(1) Notwithstanding any State law, a savings association may charge interest on any extension of credit at a rate of not more than 1 percent in excess of the discount rate on 90-day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district in which such savings association is located or at the rate allowed by the laws of the State in which such savings association is located, whichever is greater.
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(m) Branching
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(2) “Branch” defined
(a) In general
Any determination by a court or by the Director or any successor officer or agency regarding the relation of State law to a provision of this chapter or any regulation or order prescribed under this chapter shall be made in accordance with the laws and legal standards applicable to national banks regarding the preemption of State law.
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[June 13, 1933, ch. 64, § 6, as added and amended by Pub. L. No. 111-203, tit. X, §§ 1046(a), 1047(b), 124 Stat. 2017, 2018 (July 21, 2010)]
As used in this chapter—
(a) Definitions of bank and related terms
(1) Bank
The term “bank”—
(A) means any national bank and State bank, and any Federal branch and insured branch;
(B) includes any former savings association.
(2) State bank
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(f) Applicable rate and other charge limitations
(1) In general
(a) Authority. The regulations in this part are issued by the Federal Deposit Insurance Corporation (FDIC) under sections 9(a)(Tenth) and 10(g) of the Federal Deposit Insurance Act (FDI Act), 12 U.S.C. 1819(a)(Tenth), 1820(g), to implement sections 24(j) and 27 of the FDI Act, 12 U.S.C. 1831a(j), 1831d, and related provisions of the Depository Institutions Deregulation and Monetary Control Act of 1980, Public Law 96–221, 94 Stat. 132 (1980).
For purposes of this part—
Home State means, with respect to a State bank, the State by which the bank is chartered.
Host State means a State, other than the home State of a State bank, in which the State bank maintains a branch.
Insured branch has the same meaning as that term in section 3 of the Federal Deposit Insurance Act, 12 U.S.C. 1813.
The laws of a host State shall apply to any branch in the host State of an out-of-State State bank to the same extent as such State laws apply to a branch in the host State of an out-of-State national bank. To the extent host State law is inapplicable to a branch of an out-of-State State bank in such host State pursuant to the preceding sentence, home State law shall apply to such branch.
[85 Fed. Reg. 44,157 (July 22, 2020) (effective Aug. 21, 2020)]
(a) Interest rates. In order to prevent discrimination against State-chartered depository institutions, including insured savings banks, or insured branches of foreign banks, if the applicable rate prescribed in this section exceeds the rate such State bank or insured branch of a foreign bank would be permitted to charge in the absence of this paragraph (a), such State bank or insured branch of a foreign bank may, notwithstanding any State constitution or statute which is preempted by section 27 of the Federal Deposit Insurance Act, 12 U.S.C.
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(g) Interest rates
The full text of this formal statement is available online as companion material to this treatise.
What types of lenders does it apply to (e.g., banks vs. non-banks)? Applies generally to all creditors, except pawnbrokers, insurance agents or agencies that charge collection fee on unpaid balances for insurance premiums, and policy loans by life insurance companies. In addition, provisions other than that § 5-19-1(1) (definition of “finance charge”) and § 5-19-3 (maximum finance charges), do not apply to:
What types of lenders does it apply to (e.g., banks vs. non-banks)? All lenders except:
What types of lenders does it apply to (e.g., banks vs. non-banks)? Applies to any “lender of money.” § 45.45.080(a).
Licensure requirements and implications of licensure: Statute is silent.
Size and length of loans to which the statute applies, and any restrictions in the statute on these features: Loan not exceeding $10,000. Period of not over seven years. § 45.45.080(b).
Other restrictions on applicability of statute (e.g., it only applies if lender takes a mortgage on real property): Statute is silent.
What types of lenders does it apply to (e.g., banks vs. non-banks)? All loans other than bonds issued and loans made by governmental units, and loans by federally insured depository institutions. Ark. Const. amend. 89, §§ 1, 2. Consumer lawsuit lenders. § 4-57-109.
Licensure requirements and implications of licensure: Statute and constitution are silent.
Size and length of loans to which the statute applies, and any restrictions in the statute on these features: Statute and constitution are silent.