Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation (FDIC) is issuing regulations clarifying the law that governs the interest rates State- chartered banks and insured branches of foreign banks (collectively, State banks) may charge. These regulations provide that State banks are authorized to charge interest at the rate permitted by the State in which the State bank is located, or one percent in excess of the 90-day commercial paper rate, whichever is greater. The regulations also provide that whether interest on a loan is permissible under section 27 of the Federal Deposit Insurance Act is determined at the time the loan is made, and interest on a loan permissible under section 27 is not affected by a change in State law, a change in the relevant commercial paper rate, or the sale, assignment, or other transfer of the loan.
Document Headings Document headings vary by document type but may contain the following: the agency or agencies that issued and signed a document the number of the CFR title and the number of each part the document amends, proposes to amend, or is directly related to the agency docket number / agency internal file number the RIN which identifies each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions See the Document Drafting Handbook for more details. Federal Deposit Insurance Corporation 12 CFR Part 331 RIN 3064-AF21 AGENCY: Federal Deposit Insurance Corporation. ACTION: Final rule. SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is issuing regulations clarifying the law that governs the interest rates State-chartered banks and insured branches of foreign banks (collectively, State banks) may charge. These regulations provide that State banks are authorized to charge interest at the rate permitted by the State in which the State bank is located, or one percent in excess of the 90-day commercial paper rate, whichever is greater. The regulations also provide that whether interest on a loan is permissible under section 27 of the Federal Deposit Insurance Act is determined at the time the loan is made, and interest on a loan permissible under section 27 is not affected by a change in State law, a change in the relevant commercial paper rate, or the sale, assignment, or other transfer of the loan. DATES: The rule is effective on August 21, 2020. FOR FURTHER INFORMATION CONTACT: James Watts, Counsel, Legal Division, (202) 898-6678, jwatts@fdic.gov ; Catherine Topping, Counsel, Legal Division, (202) 898-3975, ctopping@fdic.gov . SUPPLEMENTARY INFORMATION: I. Objectives Section 27 of the Federal Deposit Insurance Act (FDI Act) ( 12 U.S.C. 1831d ) authorizes State banks to make loans charging interest at the maximum rate permitted by the State where the bank is located, or at one percent in excess of the 90-day commercia…
Citation: 85 FR 44146
