State Codes and Statutes

State Codes and Statutes

Statutes > Nebraska > Chapter8 > 8-133

8-133. Rate of interest; inducements prohibited;penalties; pledge of lettersof credit authorized; notice required.(1) Astate-chartered bank may pay interest at any rate on any deposits made orretained in the bank.(2) Any officer, director, stockholder, or employee of a bank or anyother person who directly or indirectly, either personally or for the bank,pays any money, gives any consideration of value, or pledges any assets, exceptas provided by law, as an inducement, in addition to the legal interest, formaking or retaining a deposit in the bank shall be guilty of a Class IV felony.Any depositor who accepts any such inducement shall be guilty of a Class IVfelony. Deposits made in violation of this section shall not be entitled topriority of payment from the assets of the bank. In determining the maximuminterest that may be paid on deposits, the bank shall consider generally recognizedsound banking principles, the financial soundness of banks, competitive conditions,and general economic conditions.(3) A bank may secure deposits made by a trustee under 11 U.S.C. 101et seq. by pledge of the assets of the bank or by furnishing a surety bondas provided in 11 U.S.C. 345. A bank may also secure deposits made by theUnited States Secretary of the Interior on behalf of any individual Indianor any Indian tribe under 25 U.S.C. 162a by a pledge of the assets of thebank or by furnishing an acceptable bond as provided in 25 U.S.C. 162a.(4) Nothing in this section shall prohibit a bank or any officer, director,stockholder, or employee thereof from providing to a depositor a guarantybond or an irrevocable, nontransferable,unconditional standby letter of credit issued by the Federal Home Loan Bankof Topeka which provides coverage for the deposits of the depositorwhich are in excess of the amounts insured by the Federal Deposit InsuranceCorporation. Any bank whichoffers letters of credit for consideration to depositors pursuant to thissection shall post a notice in the lobby of each office of such bank statingthat letters of credit issued by the Federal Home Loan Bank of Topeka whichprovide coverage for deposits in excess of the amounts insured by the FederalDeposit Insurance Corporation may be available to depositors of the bank.Provision of a letter of credit issued by the Federal Home Loan Bank of Topekaby a bank to a depositor shall be at the discretion of the bank. The noticerequired under this section shall be sufficient if made in substantially thefollowing form:NoticeThis bank is a memberof the Federal Home Loan Bank of Topeka and offers for consideration FederalHome Loan Bank of Topeka letters of credit which provide coverage for depositsin excess of the amounts insured by the Federal Deposit Insurance Corporation.Please contact a representative of the bank to determine if such a letterof credit is available to you. SourceLaws 1909, c. 10, § 27, p. 79; Laws 1911, c. 8, § 27, p. 81; R.S.1913, § 306; Laws 1919, c. 190, tit. V, art. XVI, § 27, p. 696; Laws 1921, c. 313, § 1, p. 1001; C.S.1922, § 8008; Laws 1925, c. 28, § 1, p. 119; C.S.1929, § 8-140; Laws 1930, Spec. Sess., c. 6, § 8, p. 30; Laws 1933, c. 18, § 26, p. 148; C.S.Supp.,1941, § 8-140; R.S.1943, § 8-142; Laws 1959, c. 15, § 12, p. 136; R.R.S.1943, § 8-142; Laws 1963, c. 29, § 33, p. 147; Laws 1977, LB 40, § 43; Laws 1978, LB 966, § 1; Laws 1980, LB 966, § 1; Laws 1990, LB 956, § 1; Laws 1994, LB 979, § 1; Laws 1996, LB 1053, § 4; Laws 2003, LB 217, § 5; Laws 2009, LB74, § 1.Annotations1. Excessive interest2. Other inducements1. Excessive interestTo make a prima facie case on claim against receiver of insolvent state bank, claimant need only plead and prove ownership of duly issued certificate of deposit. State ex rel. Sorensen v. State Bank of Bee, 128 Neb. 491, 259 N.W. 641 (1935).Where interest at a greater rate than the maximum allowed by law is paid on certificates of deposit, the claim of the depositor in receivership is not entitled to priority. State ex rel. Sorensen v. State Bank of Bee, 128 Neb. 442, 259 N.W. 172 (1935).Where holder of certificate on which excess interest has been paid surrenders such certificate to the bank and receives a bill payable, which is transferred to another, and such other person presents it to the bank while it is a going concern and receives in exchange a certificate of deposit drawing interest at the legal rate, such certificate is entitled to priority. State ex rel. Spillman v. Farmers Bank of Crawford, 116 Neb. 445, 217 N.W. 950 (1928).Where certificate draws lawful rate but from date anterior to its issuance, transaction was not a deposit entitled to priority. State ex rel. Spillman v. Security Bank of Eddyville, 116 Neb. 165, 216 N.W. 169 (1927).Where money was placed in a state bank and certificate of deposit issued bearing lawful rate of interest with understanding that bank should pay bonus of one percent above legal rate, transaction was not a deposit entitled to priority. State ex rel. Spillman v. Security State Bank of Eddyville , 115 Neb. 667, 214 N.W. 293 (1927); Iams v. Farmers State Bank of Decatur, 101 Neb. 778, 165 N.W. 145 (1917).Where agreement was that bank officer individually should pay the excess interest, but, without knowledge of certificate holder, the bank actually pays it, deposit was entitled to priority. State ex rel. Spillman v. Atlas Bank of Neligh, 114 Neb. 781, 210 N.W. 152 (1926); State ex rel. Davis v. Farmers State Bank of Benedict, 112 Neb. 474, 199 N.W. 839 (1924).Where interest at a rate greater than the maximum allowed has been paid by a state bank, but such practice is abandoned while the bank is a going concern, certificates issued in renewal at a lawful rate are entitled to priority, even though such renewals include accumulations of excess interest. State ex rel. Spillman v. American Exchange Bank of Bristow, 114 Neb. 626, 209 N.W. 217 (1926).Where agreement for excess interest is a closed transaction, it may be abandoned without tainting future deposits. State ex rel. Davis v. Newcastle State Bank, 114 Neb. 389, 207 N.W. 683 (1926).Where holder of certificates drawing excessive rate exchanges them for new certificates drawing legal rate, while bank is going concern, the new certificates are entitled to priority. State ex rel. Spillman v. American Exchange Bank of Bristow, 112 Neb. 834, 201 N.W. 895 (1924).Prohibition of this section does not prevent an officer of a bank, while acting in good faith, from paying additional interest on his personal account, and deposit made under such arrangement is not deprived of priority. State ex rel. Davis v. Wayne County Bank, 112 Neb. 792, 201 N.W. 907 (1924).Where secret agreement for excess interest has been abandoned, new certificate for actual amount deposited, bearing lawful rate, not vitiated. State ex rel. Davis v. Farmers State Bank of Winside, 112 Neb. 788, 201 N.W. 899 (1924).This section bearing penalty contrasted with section providing no penalty. State ex rel. Davis v. Farmers State Bank of Winside, 112 Neb. 597, 200 N.W. 173 (1924).Where bank issued certificates of deposit bearing interest at maximum legal rate and received in exchange an amount less than the face of the certificates, deposit was not entitled to priority. State ex rel. Davis v. Farmers State Bank of Halsey, 111 Neb. 117, 196 N.W. 908 (1923).Where deposit is represented by cashier's check which includes excess interest, it is not entitled to priority. State ex rel. Davis v. Banking House of A. Castetter, 110 Neb. 564, 194 N.W. 784 (1923).2. Other inducementsAgreement between stockholders of bank and its depositors and creditors that bank was to be liquidated by its officers, did not contravene this section. Department of Banking v. Walker, 131 Neb. 732, 269 N.W. 907 (1936).Where another statutory provision requires deposit of public money in bank to be secured, deposit subject to negotiations between bank and city, provisions of this section do not apply. Luikart v. City of Aurora, 125 Neb. 263, 249 N.W. 590 (1933).Pledge of assets by bank to secure or retain deposit is inducement to depositor to make such deposit, and both the bank official and depositor are subject to criminal prosecution. Bliss v. Pathfinder Irrigation District, 122 Neb. 203, 240 N.W. 291 (1932).Arrangement for "parring" checks, resulting in slight advantage above legal rate to depositor, does not deprive him of priority. State ex rel. Spillman v. Nebraska State Bank of Harvard, 118 Neb. 660, 225 N.W. 778 (1929).