Resistance and Refusal by Banks
Greetings, all.
David, and all in general,
I and many others have been experiencing resistance or downright refusals to change our signature card or open new accounts as such with a declaration that the account be redeemable in lawful money. I have a theory but I do not have proof one way or the other why these 'member banks' have been rejecting us.
USC 411 states that 'The said notes shall be obligations of the Unites States and shall be receivable by all national and member banks and Federal Reserve Banks...They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, DC, or at any Federal Reserve Bank.'
Here goes my theory based on the language in USC 411...
1) 'The said notes...shall be receivable by all [banks]'.
To me, receivable means they can accept Federal Reserve notes (with no talk of lawful money redemption at this point). So they can receive FRN's into virtually all banks.
2) 'They shall be redeemed in lawful money on demand at the [Treasury Dept, DC, or any Federal Reserve bank].
What strikes me is that 'member banks' are not included in the 'redeemable entity' list. The language could be interpreted in this manner by the 'member banks': any bank can receive FRN's into an account, but only the ones in the 'redeemable entity' list shall as obligated by law, redeem them in lawful money. So they are interpreting 'Federal Reserve bank' to mean the 12 known banks as such. Therefore, they (private, FDIC members, that ilk) interpret that they can receive your FRN's but are under no obligation to redeem in lawful money because they are not one of the '12 Federal Reserve banks'.
Although remedy exists via USC 411, the thinking is that if these 'member banks' are somehow excluded from the obligation, one would need to redeem in lawful money at one of the 12 Federal Reserve Banks or at the Treasury Department. Which for almost all of us would be incredibly impractical and frankly, incredibly unfair and not in good faith per USC 411.
Is there supporting law or documents for USC 411 that would clarify the above interpretation one way or another?
Thank you for any clarification or thoughts on this.
Resistance and Refusal by Banks
Thanks to all for the options out there. I am waiting word on my bank as to whether they will allow a change to the current account.
David, regarding your prior post below of 'where to go' if the banks refuse you, I believe a little moxy as you say in standing firm. If in fact lawful money can only be redeemed by a Federal Reserve Bank (if you read USC 411 that way), then I would think the member bank could simply pass on your demand to their neighborhood FRB as a credit to the member bank in that amount. If the bank is still resistant to the demand, then I would perhaps ask their legal department to provide me a remedy to their contention that they are not required to redeem in lawful money, as remedy to not honoring my demand is required by law, correct?
Quote:
My experience (through the brain trust) tells me that if the suitor knows what he is doing he will get the novation in place mostly because the bank has fiduciary responsibility to do business with you. In other words they may try convincing you to close down your account and if you are conditioned to obey, you will. They will not close down your account unless you are costing them like with the suitor where the employees were fired. That cost a lot so they shut down the accounts.
David, as an aside to your above post, were the bank employees fired because they were not submitting the lawful money notes into their accounting properly?
Thank you.