I 

114TH CONGRESS 

2D SESSION H. R. 5027 

To amend the Federal Reserve Act to adjust the circumstances under which 

Federal reserve bank stock is callable, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 21, 2016 

Mr. NEUGEBAUER (for himself and Mr. SESSIONS) introduced the following 

bill; which was referred to the Committee on Financial Services 

A BILL 

To amend the Federal Reserve Act to adjust the circumstances under which Federal reserve bank stock is 

callable, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. CALLABLE STOCK OF FEDERAL RESERVE 

4 BANKS. 

5 (a) IN GENERAL.—The Federal Reserve Act (12 

6 U.S.C. 221 et seq.) is amended— 

7 (1) in the third undesignated paragraph of sec8 tion 2— 

9 (A) by striking ‘‘Under regulations’’ and 

10 inserting the following: 

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1 ‘‘(3) SUBSCRIPTION TO STOCK.— 

2 ‘‘(A) IN GENERAL.—Under regulations’’; 

3 (B) by striking ‘‘one-sixth of the subscrip4 tion to be payable on call of the organization 

5 committee or of the Board of Governors of the 

6 Federal Reserve System, one-sixth within three 

7 months and one-sixth within six months there8 after, and the remainder of the subscription, or 

9 any part thereof, shall be subject to call when 

10 deemed necessary by the Board of Governors of 

11 the Federal Reserve System’’ and inserting 

12 ‘‘one-twelfth of the subscription to be paid at 

13 such time as the Board of Governors of the 

14 Federal Reserve System directs (or, in the case 

15 of a member bank with total consolidated assets 

16 of $10,000,000,000 or less, as provided under 

17 subparagraph (B)) and the remainder of the 

18 subscription, or any part thereof, shall be sub19 ject to call by the Board of Governors of the 

20 Federal Reserve System in the manner de21 scribed under subparagraph (C)’’; and 

22 (C) by adding at the end the following: 

23 ‘‘(B) TREATMENT OF MEMBER BANKS

24 WITH $10,000,000,000 OR LESS IN ASSETS.— 

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1 ‘‘(i) IN GENERAL.—With respect to 

2 the payment of subscription under sub3 paragraph (A) or section 5, a member 

4 bank with total consolidated assets of 

5 $10,000,000,000 or less may elect to pay 

6 one-half of the subscription in lieu of the 

7 one-twelfth amount specified under such 

8 subparagraph (A) or section 5. 

9 ‘‘(ii) TIMING OF ELECTION.—The 

10 election described under clause (i)— 

11 ‘‘(I) may only be made once; and 

12 ‘‘(II) shall be made before the 

13 end of the 1-year period beginning on 

14 the date the entity becomes a member 

15 bank. 

16 ‘‘(C) SUBSCRIPTION SUBJECT TO CALL.— 

17 ‘‘(i) IN GENERAL.—The Board of 

18 Governors of the Federal Reserve System 

19 may only call the subscription of a member 

20 bank under subparagraph (A) or section 5 

21 if the aggregate amount of surplus funds 

22 of the Federal reserve banks is exhausted. 

23 ‘‘(ii) RETURN OF CALLED

24 AMOUNTS.—With respect to amounts 

25 called under clause (i), a member bank 

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1 may elect to have such amounts returned 

2 to the member bank if the aggregate 

3 amount of surplus funds of the Federal re4 serve banks is $1,000,000,000 or more. 

5 ‘‘(D) INFLATION ADJUSTMENT.—The 

6 Board of Governors of the Federal Reserve Sys7 tem shall annually adjust the dollar amounts of 

8 total consolidated assets specified under sub9 paragraphs (A) and (B)(i) of this paragraph 

10 and under section 5 to reflect the change in the 

11 Gross Domestic Product Price Index, published 

12 by the Bureau of Economic Analysis.’’; and 

13 (2) in section 5, by striking ‘‘one-half of said 

14 subscription to be paid in the manner hereinbefore 

15 provided for original subscription, and one-half sub16 ject to call of the Board of Governors of the Federal 

17 Reserve System’’ and inserting ‘‘one-twelfth of said 

18 subscription to be paid in the manner hereinbefore 

19 provided for original subscription (or, in the case of 

20 a member bank with total consolidated assets of 

21 $10,000,000,000 or less, as provided under section 

22 2(3)(B)) and the remainder of the subscription, or 

23 any part thereof, subject to call of the Board of Gov24 ernors of the Federal Reserve System in the manner 

25 described under section 2(3)(C)’’. 

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1 (b) TRANSITION PROVISIONS.— 

2 (1) ELECTION BY MEMBER BANKS WITH

3 $10,000,000,000 OR LESS IN ASSETS.—Notwith4 standing section 2(3)(B)(ii) of the Federal Reserve 

5 Act, as added by subsection (a), a member bank 

6 with total consolidated assets of $10,000,000,000 or 

7 less shall make the election described under section 

8 2(3)(B) of such Act before the end of the 1-year pe9 riod beginning on the date of the enactment of this 

10 Act. 

11 (2) RETURN OF PAYMENTS.—With respect to 

12 an entity that is a member bank on the date of the 

13 enactment of this Act, the Board of Governors of 

14 the Federal Reserve System shall direct the appro15 priate Federal reserve bank to return to the member 

16 bank an amount equal to 2.5 percent of the paid-up 

17 capital stock and surplus of the member bank if, on 

18 the date of the enactment of this Act— 

19 (A) the member bank has total consoli20 dated assets of more than $10,000,000,000; or 

21 (B) the member bank has total consoli22 dated assets of $10,000,000,000 or less and 

23 elects, pursuant to paragraph (1), to pay one24 twelfth of the subscription amount described 

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1 under section 2(3) of the Federal Reserve Act 

2 instead of one-half. 

3 (3) MEMBER BANK DEFINED.—For purposes of 

4 this subsection, the term ‘‘member bank’’ has the 

5 meaning given that term under section 1 of the Fed6 eral Reserve Act. 

Æ 

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