Google Answers Logo
View Question
Q: Express powers granted under the Federal National Bank Act ( Answered,   0 Comments )
Subject: Express powers granted under the Federal National Bank Act
Category: Business and Money > Finance
Asked by: bullhorn-ga
List Price: $50.00
Posted: 17 Mar 2004 08:52 PST
Expires: 16 Apr 2004 09:52 PDT
Question ID: 317594
Does a National Bank currently have expressed power under the law to
issue credit cards?

Request for Question Clarification by pafalafa-ga on 17 Mar 2004 09:08 PST
Are you referring to banks in the U.S?

Also, you make mention of the National Bank Act, which was passed in
1864, and is rather silent on the subject of credit cards.  Are you
asking, more generally, about the status of any/all federal law that
authorizes banks to issue credit cards?

Clarification of Question by bullhorn-ga on 17 Mar 2004 11:10 PST
Someone put forth the proposition to me that a National Bank (U. S.)
had no expressed power under the Federal National Bank Act to issue a
credit card or to "lend credit" and that a credit card agreement with
a National Bank was an "ultravirus" contract and was therefore void. 
I just wanted to find out more about that.  Specifically, I want to
know if lending credit by a National Bank is an example of an express
power or an implied power.
Subject: Re: Express powers granted under the Federal National Bank Act
Answered By: pafalafa-ga on 17 Mar 2004 12:15 PST
Hello bullhorn-ga, and thanks for an interesting question.

Banking regulation in the U.S. ir a pretty complex affiar, but the
so-called National Banks are regulated in the US by the Office of the
Comptroller of the Currency.

According to an OCC document issued in 2002: "Activities Permissible
for a National Bank", which can be found on their website at:

the following rules (from pages 11-12) apply to credit card issuance
by National Banks:



General.  National bank and its operating subsidiaries may make,
purchase, sell, service orwarehouse house loans or other extensions of
credit for its own or another's account, includingconsumer loans,
credit card loans, commercial loans, residential mortgage loans,
commercial mortgage loans, and standbyletters of credit.12 USC
24(Seventh), 371; 12 CFR 5.34.  A national bank's broad authority to
lend and extendcredit includes, but is not limited to, the following

Card Banking.  National banks may perform a variety of activities
related to credit cards, including issuing credit cards, handling
credit applications for other card issuers, operating a card loss
notification service, and credit verification services over point of
service (POS) terminals.  Interpretive Letter (November 14, 1980);
Interpretive Letter (January 25, 1979); Interpretive Letter (September
18, 1975); Interpretive Letter (November 14, 1974).


As you can see, the nation's banking authority has granted its
permission for National Banks to issue credit cards.  It is also
clear, however, that this authority was granted through a series of
what the OCC calls "Interprettive Letters".  That is, the authority
for the banks to issue credit cards is presumably implied, rather than
explicitly stated, in federal law.  The OCC made explicit this
authority through the issuance of its Interpretive Letters.

Hope that clears up the matter between you and your friend.  However,
if you find you need additional information, please let me know before
rating this question.  Just post a request for clarification, and I'll
be happy to assist you further.



search strategy:  Google search on "national banks" "credit cards" authority
There are no comments at this time.

Important Disclaimer: Answers and comments provided on Google Answers are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. Google does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in answers or comments. Please read carefully the Google Answers Terms of Service.

If you feel that you have found inappropriate content, please let us know by emailing us at with the question ID listed above. Thank you.
Search Google Answers for
Google Answers  

Google Home - Answers FAQ - Terms of Service - Privacy Policy