1. Receipt
of Deposits and Collections Any Federal
reserve bank may receive from any of its member banks, or other depository
institutions, and from the United States, deposits of current funds
in lawful money, national-bank notes, Federal reserve notes, or checks,
and drafts, payable upon presentation, or other items, and also, for
collection, maturing notes and bills; or, solely for purposes of exchange
or of collection, may receive from other Federal reserve banks deposits
of current funds in lawful money, national-bank notes, or checks upon
other Federal reserve banks, and checks and drafts, payable upon presentation
within its district, or other items, and maturing notes and bills
payable within its district; or, solely for the purposes of exchange
or of collection, may receive from any nonmember bank or trust company
or other depository institution deposits of current funds in lawful
money, national-bank notes, Federal reserve notes, checks and drafts
payable upon presentation or other items, or maturing notes and bills: Provided, Such nonmember bank or trust company or other depository
institution maintains with the Federal reserve bank of its district
a balance in such amount as the Board determines taking into account
items in transit, services provided by the Federal Reserve Bank, and
other factors as the Board may deem appropriate; Provided further, That nothing in this or any other section of this Act shall be construed
as prohibiting a member or nonmember bank or other depository institution
from making reasonable charges, to be determined and regulated by
the Board of Governors of the Federal Reserve System, but in no case
to exceed 10 cents per $100 or fraction thereof, based on the total
of checks and drafts presented at any one time, for collection or
payment of checks and drafts and remission therefor by exchange or
otherwise; but no such charges shall be made against the Federal reserve
banks.
[12
USC 342. As amended by act of Sept. 7, 1916 (39 Stat. 752), which
completely revised this section; June 21, 1917 (40 Stat. 234); and
March 31, 1980 (94 Stat. 139). With respect to the receipt by Reserve
Banks of checks and drafts on deposit, see this act, section 16.]
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2. Discount of Commercial, Agricultural,
and Industrial Paper Upon the indorsement
of any of its member banks, which shall be deemed a waiver of demand,
notice and protest by such bank as to its own indorsement exclusively,
any Federal reserve bank may discount notes, drafts, and bills of
exchange arising out of actual commercial transactions; that is, notes,
drafts, and bills of exchange issued or drawn for agricultural, industrial,
or commercial purposes, or the proceeds of which have been used, or
are to be used, for such purposes, the Board of Governors of the Federal
Reserve System to have the right to determine or define the character
of the paper thus eligible for discount, within the meaning of this
Act. Nothing in this Act contained shall be construed to prohibit
such notes, drafts, and bills of exchange, secured by staple agricultural
products, or other goods, wares, or merchandise from being eligible
for such discount, and the notes, drafts, and bills of exchange of
factors issued as such making advances exclusively to producers of
staple agricultural products in their raw state shall be eligible
for such discount; but such definition shall not include notes, drafts,
or bills covering merely investments or issued or drawn for the purpose
of carrying or trading in stocks, bonds, or other investment securities,
except bonds and notes of the government of the United States. Notes,
drafts, and bills admitted to discount under the terms of this paragraph
must have a maturity at the time of discount of not more than 90 days,
exclusive of grace.
[12 USC 343. As amended
by act of Sept. 7, 1916 (39 Stat. 752), which completely revised this
section; and by act of March 4, 1923 (42 Stat. 1478). As used in this
paragraph the phrase “bonds and notes of Government of the United
States” includes Treasury bills or certificates of indebtedness. (See
act of June 17, 1929, amending section 5 of Second Liberty Bond Act
of Sept. 24, 1917). As to eligibility for discount under this paragraph
of notes representing loans to finance building construction, see
this act, section 24).]
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3. Discounts for Individuals, Partnerships, and Corporations (3) (A) In unusual
and exigent circumstances, the Board of Governors of the Federal Reserve
System, by the affirmative vote of not less than five members, may
authorize any Federal reserve bank, during such periods as the said
board may determine, at rates established in accordance with the provisions
of section 14, subdivision (d), of this Act, to discount for any participant
in any program or facility with broad-based eligibility, notes, drafts,
and bills of exchange when such notes, drafts, and bills of exchange
are indorsed or otherwise secured to the satisfaction of the Federal
Reserve bank: Provided, That before discounting any such note, draft,
or bill of exchange, the Federal reserve bank shall obtain evidence
that such participant in any program or facility with broad-based
eligibility is unable to secure adequate credit accommodations from
other banking institutions. All such discounts for any participant
in any program or facility with broad-based eligibility shall be subject
to such limitations, restrictions, and regulations as the Board of
Governors of the Federal Reserve System may prescribe.
(B) (i)
As soon as is practicable after the date of enactment of this subparagraph,
the Board shall establish, by regulation, in consultation with the
Secretary of the Treasury, the policies and procedures governing emergency
lending under this paragraph. Such policies and procedures shall be
designed to ensure that any emergency lending program or facility
is for the purpose of providing liquidity to the financial system,
and not to aid a failing financial company, and that the security
for emergency loans is sufficient to protect taxpayers from losses
and that any such program is terminated in a timely and orderly fashion.
The policies and procedures established by the Board shall require
that a Federal reserve bank assign, consistent with sound risk management
practices and to ensure protection for the taxpayer, a lendable value
to all collateral for a loan executed by a Federal reserve bank under
this paragraph in determining whether the loan is secured satisfactorily
for purposes of this paragraph.
(ii) The Board shall establish procedures
to prohibit borrowing from programs and facilities by borrowers that
are insolvent. Such procedures may include a certification from the
chief executive officer (or other authorized officer) of the borrower,
at the time the borrower initially borrows under the program or facility
(with a duty by the borrower to update the certification if the information
in the certification materially changes), that the borrower is not
insolvent. A borrower shall be considered insolvent for purposes of
this subparagraph, if the borrower is in bankruptcy, resolution under
title II of the Dodd-Frank Wall Street Reform and Consumer Protection
Act, or any other Federal or State insolvency proceeding.
(iii) A program or facility
that is structured to remove assets from the balance sheet of a single
and specific company, or that is established for the purpose of assisting
a single and specific company avoid bankruptcy, resolution under title
II of the Dodd-Frank Wall Street Reform and Consumer Protection Act,
or any other Federal or State insolvency proceeding, shall not be
considered a program or facility with broad-based eligibility.
(iv) The Board may
not establish any program or facility under this paragraph without
the prior approval of the Secretary of the Treasury.
(C) The Board shall provide
to the Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of Representatives—
(i) not later than 7 days after the Board authorizes any loan or
other financial assistance under this paragraph, a report that includes—
(I) the justification for the exercise of authority to provide such
assistance;
(II) the identity of
the recipients of such assistance;
(III) the date and amount of the assistance,
and form in which the assistance was provided; and
(IV) the material terms of the assistance,
including—
(aa) duration;
(bb) collateral pledged and the
value thereof;
(cc) all
interest, fees, and other revenue or items of value to be received
in exchange for the assistance;
(dd) any requirements imposed on the recipient
with respect to employee compensation, distribution of dividends,
or any other corporate decision in exchange for the assistance; and
(ee) the expected costs
to the taxpayers of such assistance; and
(ii) once every 30 days,
with respect to any outstanding loan or other financial assistance
under this paragraph, written updates on—
(I) the value of collateral;
(II) the amount of interest,
fees, and other revenue or items of value received in exchange for
the assistance; and
(III)
the expected or final cost to the taxpayers of such assistance.
(D) The information required to be submitted to Congress under subparagraph
(C) related to—
(i) the identity of the participants
in an emergency lending program or facility commenced under this paragraph;
(ii) the amounts borrowed
by each participant in any such program or facility;
(iii) identifying details concerning
the assets or collateral held by, under, or in connection with such
a program or facility,
shall be kept confidential, upon the written
request of the Chairman of the Board, in which case such information
shall be made available only to the Chairpersons or Ranking Members
of the Committees described in subparagraph (C).
(E) If an entity to which a Federal reserve
bank has provided a loan under this paragraph becomes a covered financial
company, as defined in section 201 of the Dodd-Frank Wall Street Reform
and Consumer Protection Act, at any time while such loan is outstanding,
and the Federal reserve bank incurs a realized net loss on the loan,
then the Federal reserve bank shall have a claim equal to the amount
of the net realized loss against the covered entity, with the same
priority as an obligation to the Secretary of the Treasury under section
210(b) of the Dodd-Frank Wall Street Reform and Consumer Protection
Act.
[12 USC 343. As added by act of July 21, 1932 (47 Stat. 715); and
amended by acts of Aug. 23, 1935 (49 Stat. 714); Dec. 19, 1991 (105
Stat. 2386); and July 21, 2010 (124 Stat. 2113). As enacted by Public
Law 111-203 (124 Stat. 2115), “any reference in any provision of Federal
law to the third undesignated paragraph of section 13 of the Federal
Reserve Act [FRA] (12 USC 343) shall be deemed to be a reference to
section 13(3) of the FRA.”]
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4. Discount or Purchase of Sight Drafts Upon the indorsement of any of its member banks, which
shall be deemed a waiver of demand, notice, and protest by such bank
as to its own indorsement exclusively, and subject to regulations
and limitations to be prescribed by the Board of Governors of the
Federal Reserve System, any Federal reserve bank may discount or purchase
bills of exchange payable at sight or on demand which grow out of
the domestic shipment or the exportation of nonperishable, readily
marketable agricultural and other staples and are secured by bills
of lading or other shipping documents conveying or securing title
to such staples: Provided, That all such bills of exchange
shall be forwarded promptly for collection, and demand for payment
shall be made with reasonable promptness after the arrival of such
staples at their destination: Provided further, that no such
bill shall in any event be held by or for the account of a Federal
reserve bank for a period in excess of ninety days. In discounting
such bills Federal reserve banks may compute the interest to be deducted
on the basis of the estimated life of each bill and adjust the
discount after payment of such bills to conform to the actual life
thereof.
[12 USC 344. As added by act of March 4, 1923 (42 Stat. 1479); and
amended by act of May 29, 1928 (45 Stat. 975).]
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5. Limitation on Discount of Paper of One
Borrower The aggregate of notes, drafts,
and bills upon which any person, copartnership, association, or corporation
is liable as maker, acceptor, indorser, drawer, or guarantor, rediscounted
for any member bank, shall at no time exceed the amount for which
such person, copartnership, association, or corporation may lawfully
become liable to a national banking association under the terms of
section 5200 of the Revised Statutes, as amended: Provided, however, That nothing in this paragraph shall be construed to change the
character or class of paper now eligible for rediscount by Federal
reserve banks.
[12 USC 345. As reenacted without change by act of March 3, 1915
(38 Stat. 958); and amended by act of Sept. 7, 1916 (39 Stat. 752),
which completely revised this section; and by act of April 12, 1930
(46 Stat. 162).]
1-116
6. Discount of
Acceptances Any Federal reserve bank
may discount acceptances of the kinds hereinafter described, which
have a maturity at the time of discount of not more than 90 days’
sight, exclusive of days of grace, and which are indorsed by at least
one member bank: Provided, That such acceptances if drawn for
an agricultural purpose and secured at the time of acceptance by warehouse
receipts or other such documents conveying or securing title covering
readily marketable staples may be discounted with a maturity at the
time of discount of not more than six months’ sight exclusive of days
of grace.
[12 USC 346. As amended by act of March 3, 1915 (38 Stat. 958); by
act of Sept. 7, 1916 (39 Stat. 752), which completely revised this
section; and by act of March 4, 1923 (42 Stat. 1479).]
1-117
7. Acceptances by Member Banks (A) Any member bank and any
Federal or State branch or agency of a foreign bank subject to reserve
requirements under section 7 of the International Banking Act of 1978
(hereinafter in this paragraph referred to as “institutions”), may
accept drafts or bills of exchange drawn upon it having not more than
six months’ sight to run, exclusive of days of grace —
(i) which
grow out of transactions involving the importation or exportation
of goods;
(ii) which
grow out of transactions involving the domestic shipment of goods;
or
(iii) which are
secured at the time of acceptance by a warehouse receipt or other
such document conveying or securing title covering readily marketable
staples.
(B) Except as provided in subparagraph (C), no institution shall
accept such bills, or be obligated for a participation share in such
bills, in an amount equal at any time in the aggregate to more than
150 per centum of its paid up and unimpaired capital stock and surplus
or, in the case of a United States branch or agency of a foreign bank,
its dollar equivalent as determined by the Board under subparagraph
(H).
1-117.1
(C) The Board, under such
conditions as it may prescribe, may authorize, by regulation or order,
any institution to accept such bills, or be obligated for a participation
share in such bills, in an amount not exceeding at any time in the
aggregate 200 per centum of its paid up and unimpaired capital stock
and surplus or, in the case of a United States branch or agency of
a foreign bank, its dollar equivalent as determined by the Board under
subparagraph (H).
(D)
Notwithstanding subparagraphs (B) and (C), with respect to any institution,
the aggregate acceptances, including obligations for a participation
share in such acceptances, growing out of domestic transactions shall
not exceed 50 per centum of the aggregate of all acceptances, including
obligations for a participation share in such acceptances, authorized
for such institution under this paragraph.
1-117.2
(E) No institution shall accept bills,
or be obligated for a participation share in such bills, whether in
a foreign or domestic transaction, for any one person, partnership,
corporation, association or other entity in an amount equal at any
time in the aggregate to more than 10 per centum of its paid up and
unimpaired capital stock and surplus, or, in the case of a United
States branch or agency of a foreign bank, its dollar equivalent as
determined by the Board under subparagraph (H), unless the institution
is secured either by attached documents or by some other actual security
growing out of the same transaction as the acceptance.
(F) With respect to an institution
which issues an acceptance, the limitations contained in this paragraph
shall not apply to that portion of an acceptance which is issued by
such institution and which is covered by a participation agreement
sold to another institution.
1-117.3
(G) In order to carry out the purposes
of this paragraph, the Board may define any of the terms used in this
paragraph, and, with respect to institutions which do not have capital
or capital stock, the Board shall define an equivalent measure to
which the limitations contained in this paragraph shall apply.
(H) Any limitation or
restriction in this paragraph based on paid-up and unimpaired capital
stock and surplus of an institution shall be deemed to refer, with
respect to a United States branch or agency of a foreign bank, to
the dollar equivalent of the paid-up capital stock and surplus of
the foreign bank, as determined by the Board, and if the foreign bank
has more than one United States branch or agency, the business transacted
by all such branches and agencies shall be aggregated in determining
compliance with the limitation or restriction.
[Formerly 12 USC 372,
as amended by act of March 3, 1915 (38 Stat. 958); by act of Sept.
7, 1916 (39 Stat. 752), which completely revised this section; and
by acts of June 21, 1917 (40 Stat. 235) and Oct. 8, 1982 (96 Stat.
1239). Omitted from the U.S. Code.]
1-118
8. Advances to Member Banks on Promissory Notes Any Federal reserve bank may make advances for periods
not exceeding fifteen days to its member banks on their promissory
notes secured by the deposit or pledge of bonds, notes, certificates
of indebtedness, or Treasury bills of the United States, or by the
deposit or pledge of debentures or other such obligations of Federal
intermediate credit banks which are eligible for purchase by Federal
reserve banks under section 13a of this Act, or by the deposit or
pledge of bonds issued under the provisions of subsection (c) of section
4 of the Home Owners’ Loan Act of 1933, as amended; and any Federal
reserve bank may make advances for periods not exceeding ninety days
to its member banks on their promissory notes secured by such notes,
drafts, bills of exchange, or bankers’ acceptances as are eligible
for rediscount or for purchase by Federal reserve banks under the
provisions of this Act, or secured by such obligations as are eligible
for purchase under section 14(b) of this Act. All such advances shall
be made at rates to be established by such Federal reserve banks,
such rates to be subject to the review and determination of the Board
of Governors of the Federal Reserve System. If any member bank to
which any such advance has been made shall, during the life or continuance
of such advance, and despite an official warning of the reserve bank
of the district or of the Board of Governors of the Federal Reserve
System to the contrary, increase its outstanding loans secured by
collateral in the form of stocks, bonds, debentures, or other such
obligations, or loans made to members of any organized stock exchange,
investment house, or dealer in securities, upon any obligation, note,
or bill, secured or unsecured, for the purpose of purchasing and/or
carrying stocks, bonds, or other investment securities (except obligations
of the United States) such advance shall be deemed immediately due and
payable, and such member bank shall be ineligible as a borrower at
the reserve bank of the district under the provisions of this paragraph
for such period as the Board of Governors of the Federal Reserve System
shall determine: Provided, That no temporary carrying or clearance
loans made solely for the purpose of facilitating the purchase or
delivery of securities offered for public subscription shall be included
in the loans referred to in this paragraph.
[12 USC 347. As added
by act of Sept. 7, 1916 (39 Stat. 753), which completely revised this
section; and amended by acts of May 19, 1932 (47 Stat. 160); May 12,
1933 (48 Stat. 46); June 16, 1933 (48 Stat. 180); Jan. 31, 1934 (48
Stat. 348); April 27, 1934 (48 Stat. 646); Oct. 4, 1961 (75 Stat.
773); and Sept. 21, 1968 (82 Stat. 856).]
9. Aggregate Liabilities of National Banks Repealed by act of Oct. 15, 1982 (96 Stat. 1510).
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10. Regulation by Board of Governors of
Discounts, Purchases and Sales The
discount and rediscount and the purchase and sale by any Federal reserve
bank of any bills receivable and of domestic and foreign bills of
exchange, and of acceptances authorized by this Act, shall be subject
to such restrictions, limitations, and regulations as may be imposed
by the Board of Governors of the Federal Reserve System.
[Omitted from U.S.
Code. As amended by act of Sept. 7, 1916 (39 Stat. 753), which completely
revised this section.]
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11. National Banks as Insurance Agents or Real Estate Loan Brokers That in addition to the powers now vested
by law in national banking associations organized under the laws of
the United States any such association located and doing business
in any place the population of which does not exceed five thousand
inhabitants, as shown by the last preceding decennial census, may,
under such rules and regulations as may be prescribed by the Comptroller
of the Currency, act as the agent for any fire, life, or other insurance
company authorized by the authorities of the State in which said bank
is located to do business in said State, by soliciting and selling
insurance and collecting premiums on policies issued by such company;
and may receive for services so rendered such fees or commissions
as may be agreed upon between the said association and the insurance
company for which it may act as agent; and may also act as the broker
or agent for others in making or procuring loans on real estate located
within one hundred miles of the place in which said bank may be located,
receiving for such services a reasonable fee or commission: Provided,
however, That no such bank shall in any case guarantee either
the principal or interest of any such loans or assume or guarantee
the payment of any premium on insurance policies issued through its
agency by its principal: And provided further, That the bank
shall not guarantee the truth of any statement made by an assured
in filing his application for insurance.
[12 USC 92. As added
by act of Sept. 7, 1916 (39 Stat. 753), which completely revised this
section.]
1-122
12. Bank Acceptances to Create
Dollar Exchange Any member bank may
accept drafts or bills of exchange drawn upon it having not more than
three months’ sight to run, exclusive of days of grace, drawn under
regulations to be prescribed by the Board of Governors of the Federal
Reserve System by banks or bankers in foreign countries or dependencies
or insular possessions of the United States for the purpose of furnishing
dollar exchange as required by the usages of trade in the respective
countries, dependencies, or insular possessions. Such drafts or bills
may be acquired by Federal reserve banks in such amounts and subject
to such regulations, restrictions, and limitations as may be prescribed
by the Board of Governors of the Federal Reserve System:
Provided,
however, That no member bank shall accept such drafts or bills
of exchange referred to
* this
paragraph for any one bank to an amount exceeding in the aggregate
ten
per
centum of the paid-up and unimpaired capital and surplus of the accepting
bank unless the draft or bill of exchange is accompanied by documents
conveying or securing title or by some other adequate security:
Provided further, That no member bank shall accept such drafts
or bills in an amount exceeding at any time the aggregate of one-half
of its paid-up and unimpaired capital and surplus.
[Formerly 12 USC 373,
as added by act of Sept. 7, 1916 (39 Stat. 754), which completely
revised this section. Not codified to the Federal Reserve Act. Omitted
from the U.S. Code.]
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13. Advances to
Individuals, Partnerships, and Corporations on Direct Obligations
of the United States Subject to such
limitations, restrictions and regulations as the Board of Governors
of the Federal Reserve System may prescribe, any Federal reserve bank
may make advances to any individual, partnership or corporation on
the promissory notes of such individual, partnership or corporation
secured by direct obligations of the United States or by any obligation
which is a direct obligation of, or fully guaranteed as to principal
and interest by, any agency of the United States. Such advances shall
be made for periods not exceeding 90 days and shall bear interest
at rates fixed from time to time by the Federal reserve bank, subject
to the review and determination of the Board of Governors of the Federal
Reserve System.
[12 USC 347c. As added by act of March 9, 1933 (48 Stat. 7) and amended
by act of Sept. 21, 1968 (82 Stat. 856).]
1-123.1
14. Transactions between Federal Reserve
Banks and a Branch or Agency of a Foreign Bank Subject to such restrictions, limitations, and regulations
as may be imposed by the Board of Governors of the Federal Reserve
System, each Federal Reserve bank may receive deposits from, discount
paper endorsed by, and make advances to any branch or agency of a
foreign bank in the same manner and to the same extent that it may
exercise such powers with respect to a member bank if such branch
or agency is maintaining reserves with such Reserve bank pursuant
to section 7 of the International Banking Act of 1978. In exercising
any such powers with respect to any such branch or agency, each Federal
Reserve bank shall give due regard to account balances being maintained
by such branch or agency with such Reserve bank and the proportion
of the assets of such branch or agency being held as reserves under
section 7 of the International Banking Act of 1978. For the purposes
of this paragraph, the terms “branch”, “agency”, and “foreign bank”
shall have the same meanings assigned to them in section 1 of the
International Banking Act of 1978.
[12 USC 347d. As added
by act of Sept. 17, 1978 (92 Stat. 621).]
