Small Block

Capital Absorption Opportunity · Community lenders

Commercial Banks and Trust Companies

Definition

A commercial bank takes deposits and makes loans under a national charter, first granted under the National Currency Act of 1864, or a state charter; a trust company is chartered mainly to manage property as a fiduciary.[1] Deposit-taking banks and trust companies can be FDIC-insured,[2] and under the Community Reinvestment Act regulators assess each bank's record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods.[3]

Federal law

  1. National Currency Act of 1864 (later titled the National Bank Act), Act of June 3, 1864, ch. 106, 13 Stat. 99. Governs national banks and the national currency system (Act of June 3, 1864, later titled the National Bank Act; it replaced the National Currency Act of 1863). Official text: govinfo.gov, U.S. Government Publishing Office.
  2. Federal Deposit Insurance Act, Act of Sept. 21, 1950, ch. 967, 64 Stat. 873. Federal Deposit Insurance Act; established the FDIC to insure deposits and defines "State bank" to include trust companies that receive deposits. Official text: govinfo.gov, U.S. Government Publishing Office.
  3. Community Reinvestment Act of 1977 (Housing and Community Development Act of 1977, title VIII), Pub. L. 95-128, title VIII, §§ 801–806, 91 Stat. 1111, 1147–1148. Community Reinvestment Act of 1977; requires regulators to assess and weigh a bank's record of meeting community credit needs (12 U.S.C. §§ 2901–2905). Official text: govinfo.gov, U.S. Government Publishing Office.

Also defined as