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#155314 - 01/30/04 04:00 PM Preemption and Interest rate
DebbieC Offline
Joined: Jul 2001
Posts: 66
Owensboro, KY USA
I'm confused. The preemption rule states that we are, as national banks, preempted from state interest rate rules. However, it refers to 12CFR7.4001 which (to me) says that we cannot exceed state usury laws for consumers loans. Think I'm missing something!

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Operations Compliance
#155315 - 01/30/04 10:18 PM Re: Preemption and Interest rate
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,460
Pre-emption applies when there is a conflict between state and federal regulations. As there is no federal usuary rate, the state limit would be the guiding factor.
Integrity. With it, nothing else matters. Without it, nothing else matters.

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#155316 - 01/31/04 12:50 PM Re: Preemption and Interest rate
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,870
Cape Cod
Preemption also includes an "except" statement -- except where federal law or regulation requires compliance with state law. This an example.

What preemption does, however, is allow a national bank to export the rates of its home state to other states without regard to the laws of those other states (in general).
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8

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