[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC85]
TITLE 12--BANKS AND BANKING
CHAPTER 2--NATIONAL BANKS
SUBCHAPTER IV--REGULATION OF THE BANKING BUSINESS; POWERS AND DUTIES OF
NATIONAL BANKS
Sec. 85. Rate of interest on loans, discounts and purchases
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 rate so limited shall
be allowed for associations organized or existing in any such State
under title 62 of the Revised Statutes. When no rate is fixed by the
laws of the State, or Territory, or District, the bank may take,
receive, reserve, or charge a rate not exceeding 7 per centum, or 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 such interest may
be taken in advance, reckoning the days for which the note, bill, or
other evidence of debt has to run. The maximum amount of interest or
discount to be charged at a branch of an association located outside of
the States of the United States and the District of Columbia shall be at
the rate allowed by the laws of the country, territory, dependency,
province, dominion, insular possession, or other political subdivision
where the branch is located. And the purchase, discount, or sale of a
bona fide bill of exchange, payable at another place 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 or receiving a greater rate of interest.
(R.S. Sec. 5197; June 16, 1933, ch. 89, Sec. 25, 48 Stat. 191; Aug. 23,
1935, ch. 614, title III, Sec. 314, 49 Stat. 711; Pub. L. 93-501, title
II, Sec. 201, Oct. 29, 1974, 88 Stat. 1558; Pub. L. 96-104, title I,
Sec. 101, Nov. 5, 1979, 93 Stat. 789; Pub. L. 96-161, title II,
Sec. 201, Dec. 28, 1979, 93 Stat. 1235; Pub. L. 96-221, title V,
Sec. 529, Mar. 31, 1980, 94 Stat. 168.)
References in Text
Title 62 of the Revised Statutes, referred to in text, was in the
original ``this Title'' meaning title LXII of the Revised Statutes,
consisting of R.S. Secs. 5133 to 5244, which are classified to sections
21, 22 to 24a, 25a, 26, 27, 29, 35 to 37, 39, 43, 52, 53, 55 to 57, 59
to 62, 66, 71, 72 to 76, 81, 83 to 86, 90, 91, 93, 93a, 94, 141 to 144,
161, 164, 181, 182, 192 to 194, 196, 215c, 481 to 485, 501, 541, 548,
and 582 of this title. See, also, sections 8, 333, 334, 475, 656, 709,
1004, and 1005 of Title 18, Crimes and Criminal Procedure. For complete
classification of R.S. Secs. 5133 to 5244 to the Code, see Tables.
Codification
R.S. Sec. 5197 derived from act June 3, 1864, ch. 106, Sec. 30, 13
Stat. 108, which was the National Bank Act. See section 38 of this
title.
Section 201 of Pub. L. 96-161, cited as a credit to this section,
was repealed by section 529 of Pub. L. 96-221, effective at the close of
Mar. 31, 1980. The amendment of this section by that repealed provision,
described in the 1979 Amendments note below, shall continue in effect
for limited purposes pursuant to section 529. See Savings Provisions
note, describing the provisions of section 529 of Pub. L. 96-221, set
out below.
Section 101 of Pub. L. 96-104, cited as a credit to this section,
was repealed by section 212 of Pub. L. 96-161, effective at the close of
Dec. 27, 1979. The amendment of this section by that repealed provision,
described in the 1979 Amendments note below, shall continue in effect
for limited purposes pursuant to section 212 of Pub. L. 96-161. See
Savings Provisions note, describing the provisions of section 212 of
Pub. L. 96-161, set out below. The amendment by Pub. L. 96-104,
Sec. 101, was duplicated with identical language in the amendment made
by Pub. L. 96-161, Sec. 201. See 1979 Amendments note below.
Section 201 of Pub. L. 93-501, cited as a credit to this section,
was repealed by Pub. L. 96-104, Sec. 1, Nov. 5, 1979, 93 Stat. 789. The
amendment of this section by that repealed provision, described in the
1974 Amendment note set out under this section, was duplicated in 1979
with identical language under section 101 of Pub. L. 96-104. See 1979
Amendments note below.
Amendments
1980--Pub. L. 96-221 repealed Pub. L. 96-104 and title II of Pub. L.
96-161, resulting in the striking out of ``or in the case of business or
agricultural loans in the amount of $25,000 or more, at a rate of 5 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,'' before ``whichever may be the greater'' in two
places. See Codification and 1979 Amendment notes under this section.
1979--Pub. L. 96-161 inserted provisions relating to a 5 per centum
interest rate on business or agricultural loans in the amount of $25,000
or more that were identical to provisions inserted earlier by Pub. L.
96-104. See Codification note above.
Pub. L. 96-104 substituted ``or in the case of business or
agricultural loans in the amount of $25,000 or more, at a rate of 5 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'' for ``whichever may
be the greater'' in two places. See Codification note above.
1974--Pub. L. 93-501 substituted ``or in the case of business or
agricultural loans in the amount of $25,000 or more, at a rate of 5 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'' for ``whichever may
be the greater'' in two places.
1935--Act Aug. 23, 1935, inserted third sentence.
1933--Act June 16, 1933, authorized interest at the alternative 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 if greater.
Effective Date of 1980 Amendment
Section 529 of Pub. L. 96-221 provided that the amendment made by
that section is effective at the close of Mar. 31, 1980.
Effective Date of 1979 Amendments
Section 207 of Pub. L. 96-161, which provided that amendment by Pub.
L. 96-161 was applicable to loans made in any State during the period
beginning on Dec. 28, 1979, and ending on the earliest of (1) in the
case of a State statute, July 1, 1980; (2) the date, after Dec. 28,
1979, on which such State adopts a law stating in substance that such
State does not want the amendment of this section made by Pub. L. 96-161
to apply with respect to loans made in such State; or (3) the date on
which such State certifies that the voters of such State, after Dec. 28,
1979, have voted in favor of, or to retain, any law, provision of the
constitution of such State, or amendment to the constitution of such
State which prohibits the charging of interest at the rates provided in
the amendment of this section by Pub. L. 96-161, was repealed by Pub. L.
96-221, title V, Sec. 529, Mar. 31, 1980, 94 Stat. 168.
Section 107 of Pub. L. 96-104, which provided that amendment by Pub.
L. 96-104 was applicable to loans made by any State during the period
beginning on Nov. 5, 1979, and ending on the earlier of July 1, 1981, or
the date after Nov. 5, 1979, on which such State adopts a law stating in
substance that such State does not want the amendment of this section to
apply with respect to loans made in such State, or the date on which
such State certifies that the voters of such State have voted in favor
of, or to retain, any law, provision of the constitution of such State,
or amendment of the constitution of such State, which prohibits the
charging of interest at the rates provided in the amendment of this
section, was repealed by Pub. L. 96-161, title II, Sec. 212, Dec. 28,
1979, 93 Stat. 1239.
Effective and Termination Dates of 1974 Amendment
Section 206 of Pub. L. 93-501, which provided that amendment by Pub.
L. 93-501 applicable to loans made in any state after Oct. 29, 1974, but
prior to the earlier of July 1, 1977, or the date (after Oct. 29, 1974)
of enactment by the state of a law prohibiting the charging of interest
at the rates provided in the amendment of this section, was repealed by
Pub. L. 96-104, Sec. 1, Nov. 5, 1979, 93 Stat. 789.
Savings Provisions
Section 529 of Pub. L. 96-221 provided in part that, notwithstanding
the repeal of Pub. L. 96-104 and title II of Pub. L. 96-161, the
provisions added to this section by those repealed laws shall continue
to apply to any loan made, any deposit made, or any obligation issued in
any State during any period when those provisions were in effect in such
State.
Section 212 of Pub. L. 96-161 provided in part that, notwithstanding
the repeal, effective at the close of Dec. 27, 1979, of Pub. L. 96-104
[which had enacted sections 86a, 371b-1, 1730e, and 1831a of this title,
amended sections 85, 1425b, and 1828 of this title and section 687 of
Title 15, Commerce and Trade, repealed sections 371b-1, 1730e, and 1831a
of this title and notes set out under sections 371b-1 and 1831a of this
title, and enacted provisions set out as notes under this section and
sections 86a, 371b-1, and 1831a of this title], the amendment which had
been made by title I of Pub. L. 96-104 and the provisions of that title
would continue to apply to any loan made in any State on or after Nov.
5, 1979, but prior to the repeal of Pub. L. 96-104, and that the
amendments made by title II of Pub. L. 96-104 would continue to apply to
any deposit made or obligation issued in any State on or after Nov. 5,
1979, but prior to the repeal of Pub. L. 96-104.
Section 1 of Pub. L. 96-104 provided in part that, notwithstanding
the repeal of titles II and III of Pub. L. 93-501 [which had enacted
sections 371b-1, 1730e, and 1831a of this title, amended sections 85,
1425b, and 1828 of this title, and section 687 of Title 15, Commerce and
Trade, and enacted provisions set out as notes under sections 371b-1 and
1831a of this title], the amendments which had been made by title II of
that Act and the provisions of such title would continue to apply to any
loan made in any State during the period specified in section 206 of
such Act [set out as a note under section 1831a of this title] and that
the amendments which had been made by title III of such Act would
continue to apply to any deposit made or obligation issued in any State
during the period specified in section 304 of such Act [set out as a
note under section 371b-1 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 [enacting sections 86a, 1730g, 1735f-7a,
1785(g), and 1831d of this title and section 687(i) of Title 15,
Commerce and Trade, and enacting provisions set out as notes under
sections 86a, 1730g, and 1735f-7 of this title], section 1735f-7 of
