1. Applications
for Membership by State Banks Any bank
incorporated by special law of any State, operating under the Code
of Law for the District of Columbia, or organized under the general
laws of any State or of the United States, including Morris Plan banks
and other incorporated banking institutions engaged in similar business,
desiring to become a member of the Federal Reserve System, may make
application to the Board of Governors of the Federal Reserve System,
under such rules and regulations as it may prescribe, for the right
to subscribe to the stock of the Federal reserve bank organized within
the district in which the applying bank is located. Such application
shall be for the same amount of stock that the applying bank would
be required to subscribe to as a national bank. For the purposes of
membership of any such bank the terms “capital” and “capital stock”
shall include the amount of outstanding capital notes and debentures
legally issued by the applying bank and purchased by the Reconstruction
Finance Corporation. The Board of Governors of the Federal Reserve
System, subject to the provisions of this Act and to such conditions
as it may prescribe pursuant thereto, may permit the applying bank
to become a stockholder of such Federal reserve bank.
[12 USC 321. As amended
by act of June 21, 1917 (40 Stat. 232), which completely revised this
section; and by acts of Feb. 25, 1927 (44 Stat. 1229); June 16, 1933
(48 Stat. 164); June 16, 1934 (48 Stat. 971); and Oct. 13, 2006 (120
Stat. 2001).
* For admission to membership of mutual savings banks, see paragraph
16.]
1-055
2. Continued Membership in Federal
Reserve System Upon the conversion
of a national bank into a State bank, or the merger or consolidation of
a national bank with a State bank which is not a member of the Federal
Reserve System, the resulting or continuing State bank may be admitted
to membership in the Federal Reserve System by the Board of Governors
of the Federal Reserve System in accordance with the provisions of
this section, but, otherwise, the Federal Reserve bank stock owned
by the national bank shall be canceled and paid for as provided in
section 5 of this Act. Upon the merger or consolidation of a national
bank with a State member bank under a State charter, the membership
of the State bank in the Federal Reserve System shall continue.
[12 USC 321.
As added by act of Aug. 17, 1950 (64 Stat. 458).]
1-056
3. Branches of State Member Banks Any such State bank which, at the date of the approval
of this Act, has established and is operating a branch or branches
in conformity with the State law, may retain and operate the same
while remaining or upon becoming a stockholder of such Federal reserve
bank; but no such State bank may retain or acquire stock in a Federal
reserve bank except upon relinquishment of any branch or branches
established after the date of the approval of this Act beyond the
limits of the city, town, or village in which the parent bank is situated. Provided, however, That nothing herein contained shall prevent
any State member bank from establishing and operating branches in
the United States or any dependency or insular possession thereof
or in any foreign country, on the same terms and conditions and subject
to the same limitations and restrictions as are applicable to the
establishment of branches by national banks except that the approval
of the Board of Governors of the Federal Reserve System, instead of
the Comptroller of the Currency, shall be obtained before any State
member bank may hereafter establish any branch and before any State
bank hereafter admitted to membership may retain any branch established
after February 25, 1927, beyond the limits of the city, town, or village
in which the parent bank is situated. The approval of the Board shall
likewise be obtained before any State member bank may establish any
new branch within the limits of any such city, town, or village.
[12 USC 321.
As added by act of Feb. 25, 1927 (44 Stat. 1229); and amended by acts
of June 16, 1933 (48 Stat. 164); Aug. 23, 1935 (49 Stat. 721); July
15, 1952 (66 Stat. 633); and Oct. 30, 2004 (118 Stat. 2232). The act
referred to in this paragraph was approved Feb. 25, 1927. For provisions
governing domestic branches of national banks, see section 5155, Revised
Statutes; for provisions governing foreign branches, see section 25,
this act.]
1-057
4. Financial Condition, Management,
and Powers In acting upon such applications
the Board of Governors of the Federal Reserve System shall consider
the financial condition of the applying bank, the general character
of its management, and whether or not the corporate powers exercised
are consistent with the purposes of this Act.
[12 USC 322. As added
by act of June 21, 1917 (40 Stat. 233), which completely revised this
section.]
1-058
5. Payment of Subscription Whenever the Board of Governors of the
Federal Reserve System shall permit the applying bank to become a
stockholder in the Federal reserve bank of the district its stock
subscription shall be payable on call of the Board of Governors of
the Federal Reserve System, and stock issued to it shall be subject
to the provisions of this Act.
[12 USC 323. As amended
by act of June 21, 1917 (40 Stat. 233), which completely revised this
section.]
1-059
6. Provisions of Law to Be Complied
with; Reports of Condition All banks
admitted to membership under authority of this section shall be required
to comply with the reserve and capital requirements of this Act, to
conform to those provisions of law imposed on national banks which prohibit such
banks from lending on or purchasing their own stock and which relate
to the withdrawal or impairment of their capital stock, and to conform
to the provisions of sections 5199(b) and 5204 of the Revised Statutes
with respect to the payment of dividends; except that any reference
in any such provision to the Comptroller of the Currency shall be
deemed for the purposes of this sentence to be a reference to the
Board of Governors of the Federal Reserve System. Such banks and the
officers, agents, and employees thereof shall also be subject to the
provisions of and to the penalties prescribed by sections 334, 656,
and 1005 of Title 18, United States Code, and shall be required to
make reports of condition and of the payment of dividends to the Federal
Reserve bank of which they become a member. Not less than three of
such reports shall be made annually on call of the Federal Reserve
bank on dates to be fixed by the Board of Governors of the Federal
Reserve System. Any bank which (A) maintains procedures reasonably
adapted to avoid any inadvertent error and, unintentionally and as
a result of such an error, fails to make or publish any report required
under this paragraph, within the period of time specified by the Board,
or submits or publishes any false or misleading report or information,
or (B) inadvertently transmits or publishes any report which is minimally
late, shall be subject to a penalty of not more than $2,000 for each
day during which such failure continues or such false or misleading
information is not corrected. The bank shall have the burden of proving
that an error was inadvertent and that a report was inadvertently
transmitted or published late. Any bank which fails to make or publish
such reports within the period of time specified by the Board, or
submits or publishes any false or misleading report or information,
in a manner not described in the 2nd preceding sentence shall be subject
to a penalty of not more than $20,000 for each day during which such
failure continues or such false or misleading information is not corrected.
Notwithstanding the preceding sentence, if any bank knowingly or with
reckless disregard for the accuracy of any information or report described
in such sentence submits or publishes any false or misleading report
or information, the Board may assess a penalty of not more than $1,000,000
or 1 percent of total assets of such bank, whichever is less, per
day for each day during which such failure continues or such false
or misleading information is not corrected. Any penalty imposed under
any of the 4 preceding sentences shall be assessed and collected by
the Board in the manner provided in subparagraphs (E), (F), (G), and
(I) of section 8(i)(2) of the Federal Deposit Insurance Act (for penalties
imposed under such section) and any such assessment (including the
determination of the amount of the penalty) shall be subject to the
provisions of such section. Any bank against which any penalty is
assessed under this subsection shall be afforded an agency hearing
if such bank submits a request for such hearing within 20 days after
the issuance of the notice of assessment. Section 8(h) of the Federal
Deposit Insurance Act shall apply to any proceeding under this paragraph.
Such reports of condition shall be in such form and shall contain
such information as the Board of Governors of the Federal Reserve
System may require.
[12 USC 324. As amended
by act of June 21, 1917 (40 Stat. 233), which completely revised this
section; and by acts of Aug. 23, 1935 (49 Stat. 713); Sept. 3, 1954
(68 Stat. 1236); Sept. 8, 1959 (73 Stat. 466); Aug. 9, 1989 (103 Stat.
480); and Sept. 23, 1994 (108 Stat. 2218). For provisions covering
loans on or purchase of their own stock by national banks, see section
5201, Revised Statutes (at
1-302); for provisions covering withdrawal
of capital or payment of unearned dividends by national banks, see
sections 5204 and 5199, Revised Statutes (at
1-305 and 1-304); for
provisions relating to impairment of capital of national banks, see
section 5205, Revised Statutes (at
1-306) and section 345, Banking
Act of 1935 (at
1-307).]
1-060
7. Examinations As a condition of
membership such banks shall likewise be subject to examinations made
by direction of the Board of Governors of the Federal Reserve System
or of the Federal reserve bank by examiners selected or approved by
the Board of Governors of the Federal Reserve System.
[12 USC 325. As added
by act of June 21, 1917 (40 Stat. 233), which completely revised this
section.]
1-061
8. Acceptance of State Examinations; Expenses;
Reports of Examinations Whenever the
directors of the Federal reserve bank shall approve the examinations
made by the State authorities, such examinations and the reports thereof
may be accepted in lieu of examinations made by examiners selected
or approved by the Board of Governors of the Federal Reserve System: Provided, however, That when it deems it necessary the board
may order special examinations by examiners of its own selection and
shall in all cases approve the form of the report. The expenses of
all examinations, other than those made by State authorities, may,
in the discretion of the Board of Governors of the Federal Reserve
System, be assessed against the banks examined and, when so assessed,
shall be paid by the banks examined. The Board of Governors of the
Federal Reserve System, at its discretion, may furnish any report
of examination or other confidential supervisory information concerning
any State member bank or other entity examined under any other authority
of the Board, to any Federal or State agency or authority with supervisory
or regulatory authority over the examined entity, to any officer,
director, or receiver of the examined entity, and to any other person
that the Board determines to be proper.
[12 USC 326. As added
by act of June 21, 1917 (40 Stat. 233), which completely revised this
section; and amended by acts of June 26, 1930 (46 Stat. 814) and Nov.
12, 1999 (113 Stat. 1475).]
1-062
9. Forfeiture of Membership If at
any time it shall appear to the Board of Governors of the Federal
Reserve System that a member bank has failed to comply with the provisions
of this section or the regulations of the Board of Governors of the
Federal Reserve System made pursuant thereto, or has ceased to exercise
banking functions without a receiver or liquidating agent having been
appointed therefor, it shall be within the power of the board after
hearing to require such bank to surrender its stock in the Federal
reserve bank and to forfeit all rights and privileges of membership.
The Board of Governors of the Federal Reserve System may restore membership
upon due proof of compliance with the conditions imposed by this section.
[12 USC 327.
As amended by act of June 21, 1917 (40 Stat. 233), which completely
revised this section; and further amended by act of April 23, 1930
(46 Stat. 251).]
1-063
10. Voluntary
Withdrawal from Membership Any State
bank or trust company desiring to withdraw from membership in a Federal
reserve bank may do so, after six months’ written notice shall have
been filed with the Board of Governors of the Federal Reserve System,
upon the surrender and cancellation of all of its holdings of capital
stock in the Federal reserve bank: Provided, That the Board
of Governors of the Federal Reserve System, in its discretion and
subject to such conditions as it may prescribe, may waive such six
months’ notice in individual cases and may permit any such State bank
or trust company to withdraw from membership in a Federal reserve
bank prior to the expiration of six months from the date of the written
notice of its intention to withdraw: Provided, however, That
no Federal reserve bank shall, except under express authority of the
Board of Governors of the Federal Reserve System, cancel within the
same calendar year more than twenty-five per centum of its capital
stock for the purpose of effecting voluntary withdrawals during that
year. All such applications shall be dealt with in the order in which
they are filed with the board. Whenever a member bank shall surrender
its stock holdings in a Federal reserve bank, or shall be ordered
to do so by the Board of Governors of the Federal Reserve System,
under authority of law, all of its rights and privileges as a member
bank shall thereupon cease and determine, and after due provision
has been made for any indebtedness due or to become due to the Federal
reserve bank it shall be entitled to a refund of its cash paid subscription
with interest at the rate of one-half of one per centum per month
from the date of last dividend, if earned, the amount refunded in
no event
to exceed the book value of the stock at that time, and shall likewise
be entitled to repayment of deposits and of any other balance due
from the Federal reserve bank.
[12 USC 328. As added
by act of June 21, 1917 (40 Stat. 233), which completely revised this
section; and amended by act of April 17, 1930 (46 Stat. 170).]
1-064
11. Capital Required for Membership No applying bank shall be admitted to membership
unless it possesses capital stock and surplus which, in the judgment
of the Board of Governors of the Federal Reserve System, are adequate
in relation to the character and condition of its assets and to its
existing and prospective deposit liabilities and other corporate responsibilities: Provided, That no bank engaged in the business of receiving deposits
other than trust funds, which does not possess capital stock and surplus
in an amount equal to that which would be required for the establishment
of a national banking association in the place in which it is located,
shall be admitted to membership unless it is, or has been, approved
for deposit insurance under the Federal Deposit Insurance Act. The
capital stock of a State member bank shall not be reduced except with
the prior consent of the Board.
[12 USC 329. As amended
by acts of June 21, 1917 (40 Stat. 234), which completely revised
this section; March 4, 1923 (42 Stat. 1478); June 16, 1933 (48 Stat.
185); and July 15, 1952 (66 Stat. 633).]
1-065
12. Waiver of Membership Requirements as to Insured Banks In order to facilitate the admission to membership
in the Federal Reserve System of any State bank which is required
under subsection (y) of section 12B of this Act to become a member
of the Federal Reserve System in order to be an insured bank or continue
to have any part of its deposits insured under such section 12B, the
Board of Governors of the Federal Reserve System may waive in whole
or in part the requirements of this section relating to the admission
of such bank to membership: Provided, That, if such bank is
admitted with a capital less than that required for the organization
of a national bank in the same place and its capital and surplus are
not, in the judgment of the Board of Governors of the Federal Reserve
System, adequate in relation to its liabilities to depositors and
other creditors, the said Board may, in its discretion, require such
bank to increase its capital and surplus to such amount as the Board
may deem necessary within such period prescribed by the Board as in
its judgment shall be reasonable in view of all the circumstances: Provided, however, That no such bank shall be required to increase
its capital to an amount in excess of that required for the organization
of a national bank in the same place.
[Formerly 12 USC 329a,
as added by act of Aug. 23, 1935 (49 Stat. 704). Omitted from the
U.S. Code. The provision of section 12B(y) requiring membership in
Federal Reserve System was repealed by act of June 20, 1939 (53 Stat.
842); and all of section 12B was withdrawn and enacted as a separate
Federal Deposit Insurance Act by act of Sept. 21, 1950 (64 Stat. 873).]
1-066
13. Laws to Which Subject Banks becoming members of the Federal Reserve System
under authority of this section shall be subject to the provisions
of this section and to those of this Act which relate specifically
to member banks, but shall not be subject to examination under the
provisions of the first two paragraphs of section fifty-two hundred
and forty of the Revised Statutes as amended by section twenty-one
of this Act. Subject to the provisions of this Act and to the regulations
of the board made pursuant thereto, any bank becoming a member of
the Federal Reserve System shall retain its full charter and statutory
rights as a State bank or trust company, and may continue to exercise
all corporate powers granted it by the State in which it was created,
and shall be entitled to all privileges of member banks, except that
the Board of Governors of the Federal Reserve System may limit the
activities of State member banks and subsidiaries of State member
banks in a manner consistent with section 24 of the Federal Deposit
Insurance Act. No Federal reserve bank shall be permitted to discount
for any State bank or trust company notes, drafts, or bills of exchange
of any one borrower who is liable for borrowed money to such State bank or
trust company in an amount greater than that which could be borrowed
lawfully from such State bank or trust company were it a national
banking association. The Federal reserve bank, as a condition of the
discount of notes, drafts, and bills of exchange for such State bank
or trust company, shall require a certificate or guaranty to the effect
that the borrower is not liable to such bank in excess of the amount
provided by this section, and will not be permitted to become liable
in excess of this amount while such notes, drafts, or bills of exchange
are under discount with the Federal reserve bank.
[12 USC 330. As added
by act of June 21, 1917 (40 Stat. 234), which completely revised this
section; and amended by acts of July 1, 1922 (42 Stat. 821) and Dec.
19, 1991 (105 Stat. 2353). As to limitations on loans by national
banks to one person, see section 5200, Revised Statutes.]
1-067
14. False Certification of Checks It shall be unlawful for any officer, clerk, or
agent of any bank admitted to membership under authority of this section
to certify any check drawn upon such bank unless the person or company
drawing the check has on deposit therewith at the time such check
is certified an amount of money equal to the amount specified in such
check. Any check so certified by duly authorized officers shall be
a good and valid obligation against such bank, but the act of any
such officer, clerk, or agent in violation of this section may subject
such bank to a forfeiture of its membership in the Federal Reserve
System upon hearing by the Board of Governors of the Federal Reserve
System.
[12 USC 331. As added
by act of June 21, 1917 (40 Stat. 234), which completely revised this
section. For additional provisions covering false certification of
checks by officers of Federal Reserve Banks and member banks, see
also section 5208, Revised Statutes and 18 USC 1004.]
1-068
15. Government Depositaries and Financial
Agents All banks or trust companies
incorporated by special law or organized under the general laws of
any State, which are members of the Federal Reserve System, when designated
for that purpose by the Secretary of the Treasury, shall be depositaries
of public money, under such regulations as may be prescribed by the
Secretary; and they may also be employed as financial agents of the
Government; and they shall perform all such reasonable duties, as
depositaries of public money and financial agents of the Government,
as may be required of them. The Secretary of the Treasury shall require
of the banks and trust companies thus designated satisfactory security,
by the deposit of United States bonds or otherwise, for the safe keeping
and prompt payment of the public money deposited with them and for
the faithful performance of their duties as financial agents of the
Government.
[12 USC 332. As added by act of May 7, 1928 (45 Stat. 492).]
1-069
16. Admission to Membership of Mutual Savings
Banks Any mutual savings bank having
no capital stock (including any other banking institution the capital
of which consists of weekly or other time deposits which are segregated
from all other deposits and are regarded as capital stock for the
purposes of taxation and the declaration of dividends), but having
surplus and undivided profits not less than the amount of capital
required for the organization of a national bank in the same place,
may apply for and be admitted to membership in the Federal Reserve
System in the same manner and subject to the same provisions of law
as State banks and trust companies, except that any such savings banks
shall subscribe for capital stock of the Federal reserve bank in an
amount equal to six-tenths of 1 per centum of its total deposit liabilities
as shown by the most recent report of examination of such savings
bank preceding its admission to membership. Thereafter such subscription
shall be adjusted semiannually on the same percentage basis in accordance
with rules and regulations prescribed by the Board of Governors of
the Federal Reserve System. If any such mutual savings bank applying for membership
is not permitted by the laws under which it was organized to purchase
stock in a Federal reserve bank, it shall, upon admission to the system,
deposit with the Federal reserve bank an amount equal to the amount
which it would have been required to pay in on account of a subscription
to capital stock. Thereafter such deposit shall be adjusted semiannually
in the same manner as subscriptions for stock. Such deposits shall
be subject to the same conditions with respect to repayment as amounts
paid upon subscriptions to capital stock by other member banks and
the Federal reserve bank shall pay interest thereon at the same rate
as dividends are actually paid on outstanding shares of stock of such
Federal reserve bank. If the laws under which any such savings bank
was organized be amended so as to authorize mutual savings banks to
subscribe for Federal reserve bank stock, such savings bank shall
thereupon subscribe for the appropriate amount of stock in the Federal
reserve bank, and the deposit hereinbefore provided for in lieu of
payment upon capital stock shall be applied upon such subscription.
If the laws under which any such savings bank was organized be not
amended at the next session of the legislature following the admission
of such savings bank to membership so as to authorize mutual savings
banks to purchase Federal reserve bank stock, or if such laws be so
amended and such bank fail within six months thereafter to purchase
such stock, all of its rights and privileges as a member bank shall
be forfeited and its membership in the Federal Reserve System shall
be terminated in the manner prescribed elsewhere in this section with
respect to State member banks and trust companies. Each such mutual
savings bank shall comply with all the provisions of law applicable
to State member banks and trust companies, with the regulations of
the Board of Governors of the Federal Reserve System and with the
conditions of membership prescribed for such savings bank at the time
of admission to membership, except as otherwise hereinbefore provided
with respect to capital stock.
[12 USC 333. As added
by act of June 16, 1933 (48 Stat. 164).]
1-070
17. Reports of Affiliates Each
bank admitted to membership under this section shall obtain from each
of its affiliates other than member banks and furnish to the Federal
reserve bank of its district and to the Board of Governors of the
Federal Reserve System not less than three reports during each year.
Such reports shall be in such form as the Board of Governors of the
Federal Reserve System may prescribe, shall be verified by the oath
or affirmation of the president or such other officer as may be designated
by the board of directors of such affiliate to verify such reports,
and shall disclose the information hereinafter provided for as of
dates identical with those fixed by the Board of Governors of the
Federal Reserve System for reports of the condition of the affiliated
member bank. Each such report of an affiliate shall be transmitted
as herein provided at the same time as the corresponding report of
the affiliated member bank, except that the Board of Governors of
the Federal Reserve System may, in its discretion, extend such time
for good cause shown. Each such report shall contain such information
as in the judgment of the Board of Governors of the Federal Reserve
System shall be necessary to disclose fully the relations between
such affiliate and such bank and to enable the Board to inform itself
as to the effect of such relations upon the affairs of such bank.
The reports of such affiliates shall be published by the bank under
the same conditions as govern its own condition reports.
[12 USC 334. As added
by act of June 16, 1933 (48 Stat. 165). As to reports of affiliates
of national banks, see section 5211, Revised Statutes (12 USC 161).]
1-071
18. Additional Reports of Affiliates Any such affiliated member bank may be
required to obtain from any such affiliate such additional reports
as in the opinion of its Federal reserve bank or the Board of Governors
of the Federal Reserve System may be necessary in order to obtain
a full and complete knowledge of the condition of the affiliated member bank.
Such additional reports shall be transmitted to the Federal reserve
bank and the Board of Governors of the Federal Reserve System and
shall be in such form as the Board of Governors of the Federal Reserve
System may prescribe.
[12 USC 334. As added
by act of June 16, 1933 (48 Stat. 165).]
1-072
19. Failure to Obtain Reports of Affiliates Any such affiliated member bank which fails to obtain
from any of its affiliates and furnish any report provided for by
the two preceding paragraphs of this section shall be subject to a
penalty of $100 for each day during which such failure continues,
which, by direction of the Board of Governors of the Federal Reserve
System, may be collected, by suit or otherwise, by the Federal reserve
bank of the district in which such member bank is located.
[12 USC 334. As added
by act of June 16, 1933 (48 Stat. 165) and amended by act of July
1, 1966 (80 Stat. 243). For definition of “affiliate” see section
2 of the Banking Act of 1933, approved June 16, 1933.]
1-073
20. Dealings in Investment Securities and
Stock State member banks shall be subject
to the same limitations and conditions with respect to the purchasing,
selling, underwriting, and holding of investment securities and stock
as are applicable in the case of national banks under paragraph “Seventh”
of section 5136 of the Revised Statutes, as amended. This paragraph
shall not apply to any interest held by a State member bank in accordance
with section 5136A of the Revised Statutes of the United States and
subject to the same conditions and limitations provided in such section.
[12 USC 335.
As added by act of June 16, 1933 (48 Stat. 165) and amended by act
of Nov. 12, 1999 (113 Stat. 1381).]
1-074
21. Stock Representing Stock of Other Corporations After the date of the enactment of the Banking Act
of 1935, no certificate evidencing the stock of any State member bank
shall bear any statement purporting to represent the stock of any
other corporation, except a member bank or a corporation engaged on
June 16, 1934 in holding the bank premises of such member bank, nor
shall the ownership, sale, or transfer of any certificate representing
the stock of any State member bank be conditioned in any manner whatsoever
upon the ownership, sale, or transfer of a certificate representing
the stock of any other corporation, except a member bank or a corporation
engaged on June 16, 1934 in holding the bank premises of such member
bank: Provided, That this section shall not operate to prevent
the ownership, sale, or transfer of stock of any other corporation
being conditioned upon the ownership, sale, or transfer of a certificate
representing stock of a State member bank.
[12 USC 336. As added
by act of June 16, 1933 (48 Stat. 165); and amended by act of Aug.
23, 1935 (49 Stat. 710). The Banking Act of 1935, referred to in this
paragraph, was approved Aug. 23, 1935. For similar provision applicable
to stock of national banks, see section 5139, Revised Statutes (12
USC 52).]
1-075
22. Examinations of Affiliates In connection with examinations of State
member banks, examiners selected or approved by the Board of Governors
of the Federal Reserve System shall make such examinations of the
affairs of all affiliates of such banks as shall be necessary to disclose
fully the relations between such banks and their affiliates and the
effect of such relations upon the affairs of such banks. The expense
of examination of affiliates of any State member bank may, in the
discretion of the Board of Governors of the Federal Reserve System,
be assessed against such bank and, when so assessed, shall be paid
by such bank. In the event of the refusal to give any information
requested in the course of the examination of any such affiliate,
or in the event of the refusal to permit such examination, or in the
event of the refusal to pay any expense so assessed, the Board of
Governors of the Federal Reserve System may, in its discretion, require
any or all State member banks affiliated with such affiliate to surrender
their stock in the Federal reserve bank and to forfeit all rights and
privileges of membership in the Federal Reserve System, as provided
in this section.
[12 USC 338. As added
by act of June 16, 1933 (48 Stat. 166). As to examinations of affiliates
of national banks, see this act, section 21.]
1-075.1
23. Investments to Promote the Public Welfare A State member bank may make investments
directly or indirectly, each of which is designed primarily to promote
the public welfare, including the welfare of low- and moderate-income
communities or families (such as by providing housing, services, or
jobs), to the extent permissible under State law. A State member bank
shall not make any such investment if the investment would expose
the State member bank to unlimited liability. The Board shall limit
a State member bank’s investment in any 1 project and a State member
bank’s aggregate investments under this paragraph. The aggregate amount
of investments of any State member bank under this paragraph may not
exceed an amount equal to the sum of 5 percent of the State member
bank’s capital stock actually paid in and unimpaired and 5 percent
of the State member bank’s unimpaired surplus, unless the Board determines,
by order, that a higher amount will pose no significant risk to the
affected deposit insurance fund; and the State member bank is adequately
capitalized. In no case shall the aggregate amount of investments
of any State member bank under this paragraph exceed an amount equal
to the sum of 15 percent of the State member bank’s capital stock
actually paid in and unimpaired and 15 percent of the State member
bank’s unimpaired surplus. The foregoing standards and limitations
apply to investments under this paragraph made by a State member bank
directly and by its subsidiaries.
[12 USC 338a. As added
by act of Oct. 23, 1992 (106 Stat. 2774) and amended by acts of Feb.
15, 2006 (119 Stat. 3616); Oct. 13, 2006 (120 Stat. 1971); and July
30, 2008 (122 Stat. 2857).]