Edge Act Corporation
An Edge Act corporation, or “edgie,” is a specialized banking organization in international trade-related transactions or investments open to US domestic banks since 1919 and to foreign banks since 1978. Edge Act corporations are restricted to handle foreign customers and to handle the international business activities of domestic customers.These activities include trade-financing arrangements, deposit taking from outside the USA, lending money to international businesses and making equity investments in foreign operations.
An edgie allows a bank to undertake the above-mentioned activities especially in a port city, which may be in a different state from the state of the bank’s domicile.Thus it enables a bank to circumvent prohibition of interstate operations, a feature that was much more appealing prior to 1978 when the deregulation movement started.12 By its very nature, the edgie undertakes activities peripheral to the mainstream business; hence competent employees have not been enthusiastic about assignment to the edgie business, unless it is understood as interim.
An edgie allows a bank to undertake the above-mentioned activities especially in a port city, which may be in a different state from the state of the bank’s domicile.Thus it enables a bank to circumvent prohibition of interstate operations, a feature that was much more appealing prior to 1978 when the deregulation movement started.12 By its very nature, the edgie undertakes activities peripheral to the mainstream business; hence competent employees have not been enthusiastic about assignment to the edgie business, unless it is understood as interim.
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