What Law Gives Banks The Ability To Turn A Promissory Note Into Cash
12 U.S. Code ยง 372 gives "lenders" the right to convert a promissory note into Federal Reserve Notes under the citation, "any Federal or State branch or agency of a foreign bank ... may accept drafts or bills of exchange drawn upon it". This law allows lenders to act as a middle-man to the transaction and be paid a fee for their services. Unfortunately, lenders charge more than this fee due to the fact that the contract at the closing table is not signed by the borrower on BOTH SIDES. If both sides were indorsed then the lender would be unable to pocket the funds for themselves by countersigning on one's behalf.