Mills Company, Inc., is a manufacturing company with a working capital line of credit from First National Bank. The credit agreement governing the loan states that Mills cannot obtain additional unsecured credit without the approval of the bank. Mills believes that such a clause violates the Bank Holding Company Act's anti-tying clause. Does it?
A. No, unless the bank refuses to grant additional credit to Mills itself
B. Yes, unless the bank will reasonably allow additional credit at Mills's request.
C. No, since this clause relates to the soundness of the credit
D. Yes. It is a restraint of trade.
Answer:C
Mills Company, Inc., is a manufacturing company with a working capital line of credit from First National Bank. The credit agreement governing the loan states that Mills cannot obtain additional unsecured credit without the approval of the bank. Mills believes that such a clause violates the Bank Holding Company Act's anti-tying clause. Does it?
A. No, unless the bank refuses to grant additional credit to Mills itself B. Yes, unless the bank will reasonably allow additional credit at Mills's request. C. No, since this clause relates to the soundness of the credit D. Yes. It is a restraint of trade.