CONSTITUTIONAL LAW-BANK GUARANTY FUNDS

Authors

Abstract

The plaintiff state bank sued to enjoin collection of special assessments under a state bank guaranty law providing for assessments on every bank to establish a fund to protect depositors in failed banks, on the ground that the statute authorizing the assessments had become void as being confiscatory. At the time suit was instituted, the assessments totaled six-tenths of one per cent of average daily deposits, but after an appeal was taken from the decision of the state court, dismissing the injunction granted by the district court, a new act reduced the assessments to two-tenths of one per cent, limited to a period of ten years, and to be distributed only to depositors of banks closed prior to the act. Held, that although the bank guaranty law had been sustained as a police regulation, it might become invalid later, as confiscatory; but that the modification providing, in effect, for a method of liquidating the guaranty plan, prevented the statute from being arbitrary and confiscatory. Abie State Bank v. Weaver (U. S. Sup. Ct. 1930, Adv. Op. 63) 51 Sup. Ct. 252.

Recommended Citation

CONSTITUTIONAL LAW-BANK GUARANTY FUNDS, 29 Mich. L. Rev. 1073 (1931).
Available at: https://repository.law.umich.edu/mlr/vol29/iss8/15