Federal Interest Rate Authority

Federal Interest Rate Authority
Subject: Valid when made
Agency: FDIC
Status: Final rule

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.

FR Doc: 2020-14114
Date proposed: Nov. 19, 2019
Comments due date:

Feb. 4, 2020

Final rule effective date: Aug. 21, 2020
Rule compliance date:
Agency release:

Related Reg Report item(s): State banks would see clarification for ‘valid when made’ guideline under proposal