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HomeFinancial CodeDiv. 1.1Ch. 19Art. 1§ 1675 Foreign Bank Interest Exemption

§ 1675 Foreign Bank Interest Exemption

Financial Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 1675 Foreign Bank Interest Exemption

This law lets banks from other states avoid California's interest rate limits on loans.

Key Takeaways

  • •Out-of-state banks are exempt from California's constitutional interest rate restrictions.
  • •They must still follow every other California law that applies to their banking activities.
  • •The exemption is specifically authorized by the state constitution.

Example

A bank based in Nevada wants to lend money to a customer in California and charge an interest rate higher than the usual California cap.

Because of this statute, the out-of-state bank can charge that higher rate without breaking California's interest rules, but it must still obey all other California banking laws.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 1675 Foreign Bank Interest Exemption

(a) Any foreign (other state) state bank is exempted from the restrictions of Section 1 of Article XV of the California Constitution relating to rates of interest upon the loan or forbearance of any money, goods, or things in action or on accounts after demand. (b) This section does not exempt a foreign (other state) state bank or any subsidiary from complying with all other laws and regulations governing the business in which the bank or subsidiary is engaged. (c) This section creates and authorizes an exempt class of persons pursuant to Section 1 of Article XV of the California Constitution. (Added by Stats. 2011, Ch. 243, Sec. 3. (SB 664) Effective January 1, 2012.)

Last verified: January 11, 2026

Key Terms

foreign (other state) state bankexempt classSection 1 of Article XV of the California Constitution

Related Statutes

  • § 1676 Territorial Bank Office Restrictions
  • § 18665 Foreign Loan Interest Exemption
  • § 1670 Banking Business Definitions
  • § 1671 Application Filing Requirements
  • § 1672 Foreign Bank Reporting Requirements

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Financial Code. Section 1675.
View Official Source