Banking in The United States - Early 20th Century - McFadden Act

McFadden Act

The McFadden Act was enacted in 1927 based on recommendations made by the Comptroller of Currency Henry May Dawes. The Act sought to give national banks competitive equality with state-chartered banks by letting national banks branch to the extent permitted by state law. The McFadden Act specifically prohibited interstate branching by allowing each national bank to branch only within the state in which it is situated. Although the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 repealed this provision of the McFadden Act, it specified that state law continues to control intrastate branching, or branching within a state's borders, for both state and national banks.