§ 1831d. — Statechartered insured depository institutions and insured branches of foreign banks.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1831d]
TITLE 12--BANKS AND BANKING
CHAPTER 16--FEDERAL DEPOSIT INSURANCE CORPORATION
Sec. 1831d. State-chartered insured depository institutions and
insured branches of foreign banks
(a) Interest rates
In order to prevent discrimination against State-chartered insured
depository institutions, including insured savings banks, or insured
branches of foreign banks with respect to interest rates, if the
applicable rate prescribed in this subsection exceeds the rate such
State bank or insured branch of a foreign bank would be permitted to
charge in the absence of this subsection, such State bank or such
insured branch of a foreign bank may, notwithstanding any State
constitution or statute which is hereby preempted for the purposes of
this section, take, receive, reserve, and charge on any loan or discount
made, or upon any note, bill of exchange, or other evidence of debt,
interest at a rate of not more than 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 such State bank or
such insured branch of a foreign bank is located or at the rate allowed
by the laws of the State, territory, or district where the bank is
located, whichever may be greater.
(b) Interest overcharge; forfeiture; interest payment recovery
If the rate prescribed in subsection (a) of this section exceeds the
rate such State bank or such insured branch of a foreign bank would be
permitted to charge in the absence of this section, and such State fixed
rate is thereby preempted by the rate described in subsection (a) of
this section, the taking, receiving, reserving, or charging a greater
rate of interest than is allowed by subsection (a) of this section, 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. If such greater rate of
interest has been paid, the person who paid it may recover in a civil
action commenced in a court of appropriate jurisdiction not later than
two years after the date of such payment, an amount equal to twice the
amount of the interest paid from such State bank or such insured branch
of a foreign bank taking, receiving, reserving, or charging such
interest.
(Sept. 21, 1950, ch. 967, Sec. 2[27], as added Pub. L. 96-221, title V,
Sec. 521, Mar. 31, 1980, 94 Stat. 164; amended Pub. L. 100-86, title I,
Sec. 101(g)(2), Aug. 10, 1987, 101 Stat. 563; Pub. L. 101-73, title II,
Sec. 201(a), Aug. 9, 1989, 103 Stat. 187.)
Prior Provisions
Provisions similar to this section were contained in section 1831a
of this title prior to its repeal by Pub. L. 96-221.
Amendments
1989--Subsec. (a). Pub. L. 101-73 substituted ``insured depository
institutions'' for ``insured banks''.
1987--Subsec. (a). Pub. L. 100-86 struck out ``and insured mutual
savings banks'' after ``insured savings banks''.
Effective Date
Section applicable only with respect to loans made in any State
during the period beginning on April 1, 1980, and ending on the date, on
or after April 1, 1980, on which such State adopts a law or certifies
that the voters of such State have voted in favor of any provision,
constitutional or otherwise, which states explicitly and by its terms
that such State does not want this section to apply with respect to
loans made in such State, except that this section shall apply to a loan
made on or after the date such law is adopted or such certification is
made if such loan is made pursuant to a commitment to make such loan
which was entered into on or after April 1, 1980, and prior to the date
on which such law is adopted or such certification is made, see section
525 of Pub. L. 96-221, set out as an Effective Date of 1980 Amendment
note under section 1785 of this title.
Choice of Highest Applicable Interest Rate
In any case in which one or more provisions of, or amendments made
by, title V of Pub. L. 96-221, section 1735f-7 of this title, or any
other provisions of law, including section 85 of this title, apply with
respect to the same loan, mortgage, credit sale, or advance, such loan,
mortgage, credit sale, or advance may be made at the highest applicable
rate, see section 528 of Pub. L. 96-221, set out as a note under section
1735f-7a of this title.
Definition of ``State''
For purposes of this section, the term ``State'' to include the
several States, the Commonwealth of Puerto Rico, the District of
Columbia, Guam, the Trust Territories of the Pacific Islands, the
Northern Mariana Islands, and the Virgin Islands, see section 527 of
Pub. L. 96-221, set out as a note under section 1735f-7a of this title.
Section Referred to in Other Sections
This section is referred to in section 1831u of this title.