Bank must lend deposits, not credit.

Below is case law that explains why Credit Card Companies always sell their debt to Attorneys for less than 20%.  They are buying credit extended debt.  If the Credit Company were to show up in court they could run the risk of being caught red handed in lending computer generated credit.  This is one primary reason for the inflated US dollar.

The Defendant, M & T BANK, has no right to lend credit as this is a violation of their corporate charter and violates Federal law, and is prohibited under the doctrine of ultra vires.

The United States Supreme Court and the lower courts have long recognized that the banks cannot loan credit.

“In the federal courts, it is well established that a national bank has not

power to lend its credit to another by becoming surety, endorser, or guarantor for

him.” Farmers and Miners Bank v. Bluefield Nat ‘l Bank, 11 F 2d 83, 271 U.S. 669.

“A national bank has no power to lend its credit to any person or corporation.”

. . . Bowen v. Needles Nat. Bank, 94 F 925 36 CCA 553, certiorari denied in 20 S.Ct 1024, 176 US 682, 44 LED 637.

“The doctrine of ultra vires is a most powerful weapon to keep private corporation within their legitimate spheres and to punish them for violations of their corporate charters, and it probably is not invoked too often .. .” Zinc Carbonate Co. v. First National Bank, 103 Wis 125, 79 NW 229.  American Express Co. v. Citizens State Bank, 194 NW 430.

“A bank may not lend its credit to another even though such a transaction turns

out to have been of benefit to the bank, and in support of this a list of cases

might be cited, which-would look like a catalog of ships.” [Emphasis added] Norton Grocery Co. v. Peoples Nat. Bank, 144 SE 505. 151 Va 195.

“It has been settled beyond controversy that a national bank, under federal

Law being limited in its powers and capacity, cannot lend its credit by guaranteeing

the debts of another. All such contracts entered into by its officers are ultra

vires . . .” Howard & Foster Co. v. Citizens Nat’l Bank of Union, 133 SC

202, 130 SE 759(1926).

“Neither, as included in its powers not incidental to them, is it a part of

a bank’s business to lend its credit. If a bank could lend its credit as well as

its money, it might, if it received compensation and was careful to put its name

only to solid paper, make a great deal more than any lawful interest on its money

would amount to. If not careful, the power would be the mother of panics, . . .

Indeed, lending credit is the exact opposite of lending money, which is the real

business of a bank, for while the latter creates a liability in favor of the bank,

the former gives rise to a liability of the bank to another. I Morse. Banks and

Banking 5th Ed. Sec 65; Magee, Banks and Banking, 3rd Ed. Sec 248.” American

Express Co. v. Citizens State Bank, 194 NW 429.

“It is not within those statutory powers for a national bank, even though solvent,

to lend its credit to another in any of the various ways in which that might be

done.” Federal Intermediate Credit Bank v. L ‘Herrison, 33 F 2d 841, 842 (1929).

“There is no doubt but what the law is that a national bank cannot lend its credit or become an accommodation endorser.” National Bank of Commerce v. Atkinson, 55 E 471.

“A bank can lend its money, but not its credit.” First Nat’l Bank of Tallapoosa

v. Monroe. 135 Ga 614, 69 SE 1124, 32 LRA (NS) 550.

“.. . the bank is allowed to hold money upon personal security; but it must

be money that it loans, not its credit.” Seligman v. Charlottesville Nat. Bank,

3 Hughes 647, Fed Case No.12, 642, 1039.

“A loan may be defined as the delivery by one party to, and the receipt by

another party of, a sum of money upon an agreement, express or implied, to repay

the sum with or without interest.” Parsons v. Fox; 179 Ga 605, 176 SE 644. Also

see Kirkland v. Bailey, 155 SE 2d 701 and United States v. Neifert White Co., 247

Fed Supp 878, 879.

Click HERE to view the list of foundational information created by Lawyer Paul John Hansen to aid in independence from the US System.