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#28161 - 08/16/02 05:55 PM Who Rules?
Suwannee Offline
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Suwannee
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Florida
If a lender is located in say, the State of Florida and is lending in New York (with the proper licensing, of course), secured or unsecured transaction, other than a mortgage, which state's law does the lender follow?

Also, which state rules record retention?


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#28162 - 08/16/02 06:24 PM Re: Who Rules?
D2Xs Offline
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D2Xs
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Do they have a national charter or state charters?
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#28163 - 08/16/02 06:43 PM Re: Who Rules?
Suwannee Offline
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Suwannee
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Florida
Can you give me an answer(s) relevant to both types of charters? Thanks.
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#28164 - 08/16/02 06:46 PM Re: Who Rules?
Dave M_TCA Online
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This might also be covered in your documentation. We state in ours that the laws of the State of Illinois cover the note. We lend outside of Illinois (rarely) but Illinois law covers those transactions as well.
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#28165 - 08/16/02 06:50 PM Re: Who Rules?
Andy_Z Online
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We do the same and say that Texas laws prevail. That sounds good to me and on the note, but I don't know how state Attorneys Generals feel about it when something conflicts with their laws. While that works for consumer loans, RE is definitely a state law issue based on the property location.
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#28166 - 08/16/02 06:51 PM Re: Who Rules?
Rubaiyat Offline
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Lido Deck
Unfortunately, there is no cut-and-dried answer to this question. We are a national bank and on some issues we rely on and abide by the federal regulations. However, my state has some pretty funky laws which we must comply with even though we are a national charter. I go to my regulator on a case by case basis if I have a question so I at least have the opinion of a higher authority. In some cases, the line is so blurred that they have had to go to Washington D.C. for a verdict.
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#28167 - 08/16/02 07:23 PM Re: Who Rules?
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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In some cases you say that your state law governs; however, in situations like foreclosure, you will have to go by the law of the state where the real estate is located. It is not an easy question to answer but in the actual loan documents, the bank attorneys usually put your home state as governing law. And to further complicate, that can be negotiated with certain customers.
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#28168 - 08/21/02 03:34 PM Re: Who Rules?
Howard Lax Offline
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Howard Lax
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Bloomfield Hills, Michigan
The law on which state's "interest" charges apply is laid out in two FDIC General Counsel Opinions (Nos. 10 and 11) that can be accessed at http://www.fdic.gov/regulations/laws/rules/5500-100.html

Opinion No. 10 defines "interest" and No. 11 resolves the issue of interstate transactions.
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