National banking under the Federal Reserve System

Bibliographic data

Monograph

Identifikator:: 1757542345

URN:: urn:nbn:de:zbw-retromon-135097

Document type:: Monograph

Title:: National banking under the Federal Reserve System

Place of publication:: New York

Publisher:: The National City Bank of New York

Year of publication:: 1927

Scope:: 154 S.

Digitisation:: 2021

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Interest

Collection:: Economics Books

INTEREST 1. Legal Rate—The legal rate of interest for a national bank is governed by the laws of the state in which the bank is located. Where the laws of a state fix a different interest rate for banks of issue organized under state laws, national banks are allowed the same rate. If the state laws do not fix an interest limit, a national bank may charge a rate not exceeding 7 per cent. Such interest may be taken in advance. The purchase, discount, or sale of a bona fide bill of exchange, payable at a place other than the place of such purchase, discount or sale, at not more than the current rate of exchange for sight drafts in addition to the interest, shall not be considered as taking a greater rate of interest. A national bank in making contracts for interest on loans is placed on an equal footing with the citizens and with the banks organized under the laws of the state in which it is located. The national bank may contract for, charge, and receive a rate of interest on a loan made to a resident of another state, at a rate allowed by the laws of that state, even though such rate is greater than that prescribed by or expressed in the laws of the state in which the bank is located, provided a) That the note or contract evidencing the loan is made payable or is to be performed in the state authorizing the greater rate, (b) And that the transaction is made in good faith. 2. On Deposits—The National Bank Act, as amended February 25, 1927, authorizes a national bank to operate a savings department, and to pay interest on saving deposits with limitations as to the rates to be paid. The following excerpt from the Act bears upon this point: National banks “may continue hereafter as heretofore to receive time and savings deposits and to pay interest on the same, but the rate of interest which such banks may pay upon such time deposits or upon savings or other deposits shall not exceed the maximum rate authorized by law to be paid upon such deposits by State banks or trust companies organized under the laws of the State wherein such national banking association is located.” lee vv |

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