12 CFR 7.4008 - Lending by national banks.

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§ 7.4008 Lending by national banks.

(a)Authority of national banks. A national bank may make, sell, purchase, participate in, or otherwise deal in loans and interests in loans that are not secured by liens on, or interests in, real estate, subject to such terms, conditions, and limitations prescribed by the Comptroller of the Currency and any other applicable Federal law.

(b)Standards for loans. A national bank shall not make a consumer loan subject to this § 7.4008 based predominantly on the bank's realization of the foreclosure or liquidation value of the borrower's collateral, without regard to the borrower's ability to repay the loan according to its terms. A bank may use any reasonable method to determine a borrower's ability to repay, including, for example, the borrower's current and expected income, current and expected cash flows, net worth, other relevant financial resources, current financial obligations, employment status, credit history, or other relevant factors.

(c)Unfair and deceptive practices. A national bank shall not engage in unfair or deceptive practices within the meaning of section 5 of the Federal Trade Commission Act, 15 U.S.C. 45(a)(1), and regulations promulgated thereunder in connection with loans made under this § 7.4008.

(d)Applicability of state law. A national bank may make non-real estate loans without regard to state law limitations concerning:

(1) Licensing, registration (except for purposes of service of process), filings, or reports by creditors;

(2) The ability of a creditor to require or obtain insurance for collateral or other credit enhancements or risk mitigants, in furtherance of safe and sound banking practices;

(3) Loan-to-value ratios;

(4) The terms of credit, including the schedule for repayment of principal and interest, amortization of loans, balance, payments due, minimum payments, or term to maturity of the loan, including the circumstances under which a loan may be called due and payable upon the passage of time or a specified event external to the loan;

(5) Escrow accounts, impound accounts, and similar accounts;

(6) Security property, including leaseholds;

(7) Access to, and use of, credit reports;

(8) Disclosure and advertising, including laws requiring specific statements, information, or other content to be included in credit application forms, credit solicitations, billing statements, credit contracts, or other credit-related documents;

(9) Disbursements and repayments; and

(10) Rates of interest on loans. 6

6 The limitations on charges that comprise rates of interest on loans by national banks are determined under Federal law. See 12 U.S.C. 85; 12 CFR 7.4001. State laws purporting to regulate national bank fees and charges that do not constitute interest are addressed in 12 CFR 7.4002.

(e)State laws that are not preempted. State laws on the following subjects are not inconsistent with the non-real estate lending powers of national banks and apply to national banks to the extent consistent with the decision of the Supreme Court in Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance Commissioner, et al., 517 U.S. 25 (1996):

(1) Contracts;

(2) Torts;

(3) Criminal law; 7

7 See supra note 5 regarding the distinction drawn by the Supreme Court in Easton v. Iowa, 188 U.S. 220, 238 (1903).

(4) Rights to collect debts;

(5) Acquisition and transfer of property;

(6) Taxation;

(7) Zoning; and

(8) Any other law that the OCC determines to be applicable to national banks in accordance with the decision of the Supreme Court in Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance Commissioner, et al., 517 U.S. 25 (1996) or that is made applicable by Federal law.

[ 69 FR 1916, Jan. 13, 2004, as amended at 76 FR 43565, July 21, 2011]

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.

United States Code
U.S. Code: Title 12 - BANKS AND BANKING

§ 1 - Office of the Comptroller of the Currency

§ 2 - Comptroller of the Currency; appointment; term

§ 3 - Oath of Comptroller

§ 4 - Deputy Comptrollers

§ 4a - Delegation of authority by Comptroller

§ 4b - Deputy Comptroller for the supervision and examination of Federal savings associations

§ 5, 6 - Repealed. Pub. L. 86–251, § 1(b), (c)(1), Sept. 9, 1959, 73 Stat. 487, 488

§ 7 - Chief of examining division

§ 8 - Clerks

§ 9 - Additional examiners, clerks, and other employees

§ 9a - Repealed. Pub. L. 89–554, § 8(a), Sept. 6, 1966, 80 Stat. 645

§ 10 - Salaries of Deputy Comptrollers, examiners, and other employees as part of bank examination expenses

§ 11 - Interest in national banks

§ 12 - Seal of Comptroller

§ 13 - Rooms for Currency Bureau

§ 14 - Report of Comptroller

§ 15 - Repealed. Aug. 7, 1946, ch. 770, § 1(40, 50), 60 Stat. 869, 870

§ 16 - Funding of Office

§ 25b - State law preemption standards for national banks and subsidiaries clarified

§ 71 - Election

§ 71a - Number of directors; penalties

§ 92 - Acting as insurance agent or broker

§ 92a - Trust powers

§ 93 - Violation of provisions of chapter

§ 93a - Authority to prescribe rules and regulations

§ 371 - Real estate loans

§ 371a - Repealed. Pub. L. 111–203, title VI, § 627(a)(1), July 21, 2010, 124 Stat. 1640

§ 481 - Appointment of examiners; examination of member banks, State banks, and trust companies; reports

§ 484 - Limitation on visitorial powers

§ 1465 - State law preemption standards for Federal savings associations clarified

§ 1818 - Termination of status as insured depository institution

§ 5412 - Powers and duties transferred

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