| Subject: |
Bank Loans - Interest Rates |
The Bureau has received a number of inquiries as to whether
a state-chartered bank may make credit union type loans and,
if so, at what rate of interest and under what conditions.
Interest rates which a state-chartered bank may charge are
stated in Sections 191 and 192 of the Banking Code of 1969.
Subsection (d) of Section 191 reads as follows:
"(d) On any loan not covered by subdivisions (a),
(b) or (c), a bank may charge, collect, and receive interest
and other charges in the same manner and at up to the maximum
rate or amount permitted by law for the same type of loans made
by national banking associations authorized to do business in
this state."
The position of the Bureau based upon a reading of this Subsection
191(d) in conjunction with the remainder of Section 191 and 192
is that a state bank may charge a rate of interest on a loan up
to 15% per annum, simple interest, if such bank has positive evidence
that a national bank located anywhere in Michigan is charging
such an interest rate on similar loans and that the loan is not
an installment loan subject to 191(c) or a credit card loan subject
to 191(a).
| Signed: |
Richard J. Francis, Commissioner |
| |
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| Dated: |
April 28, 1976 |
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