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National Banks And Interest

National Banks And Interest image
Parent Issue
Public Domain
OCR Text

The question of interest chargeable by National Banks has boen severa! times before the courts, but has at lasl been settled by the dejision of the Supreme Court of the United States in the case of tho Farmers' and Merchants National Bank of BufFalo agaiuRt Dearing. The points made wore a6 follows: 1. ïho rate of interest chargeable by oaoh bank is to be that ailowed by the law of the State or Torritory where the bank is situated. 2. Where by laws of the State or Territory a different rate is limited for banks of issue organized under the loca] laws, the rate su limited is ailowed for the National Banks. 3. Whore no rato of interest is fixed by the laws of the State or Territory, the National Banks muy charge at a rate not exeeediug seven por pent. per aunutn. 4. Such interest may bo roceived or taken in advauce. 5. Kuowingly rosorving, receiviug or charging " a rate of interest grtater than aforcstiid shall be held and be adjudged a forfeiture of the interest whieh the note, bilí or other ovidence of debt carries with it, or which has been agreed to be paid thereon." 6. If a greater rate has been paid, twico the iimount so paid may be re covored hack, provided suit be brought within tw'o years from the time the usurious transaction occurred. 7. The purchase, discount or sale of a bilí of uxchange payable at anothor place, at not more than tho curreut rate of exchange on sight drafts, in addition to the interest, shall not be considereJ as taking a greater rate of interest than that permitted. 8. That the National Bank act is constitutional. 9. The court construes the provisions of tho act relating to the penalty for taking moro than luwful interest, and holds that that the plaintiff below was eutitlod to recover the principal of the note sued upon less the amount of interest unluwiully roserved.


Old News
Michigan Argus