Source: https://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title12-chapter3-subchapter10&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGUxMi1zZWN0aW9uMzc2%7C%7C%7C0%7Cfalse%7Cprelim&edition=prelim
Timestamp: 2020-07-08 23:22:41
Document Index: 682780793

Matched Legal Cases: ['§627', '§7', '§207', '§529', '§529', '§529', '§211', '§212', '§204', '§1', '§304', '§213', '§308', '§308', '§608', '§608', '§608', '§608', '§608', '§608', '§608', '§608', '§608', '§608', '§608', '§608', '§608', '§609', '§608', '§608', '§608', '§608', '§608', '§22', '§22', '§608', '§410', '§608', '§608', '§608', '§608', '§372', '§615', '§421', '§421', '§421', '§22', '§104', '§410', '§306', '§955', '§1605', '§334', '§2211', '§614', '§2211', '§1605', '§955', '§306', '§306', '§306', '§306', '§422', '§410', '§614', '§306', '§2101', '§306', '§306', '§306']

[USC02] 12 USC CHAPTER 3, SUBCHAPTER X: POWERS AND DUTIES OF MEMBER BANKS
<< Previous TITLE 12 / CHAPTER 3 / SUBCHAPTER X Next >>
12 USC CHAPTER 3, SUBCHAPTER X: POWERS AND DUTIES OF MEMBER BANKS
Pub. L. 111–203, title VI, §627(b), July 21, 2010, 124 Stat. 1640, provided that: "The amendments made by subsection (a) [amending sections 1464 and 1828 of this title and repealing this section] shall take effect 1 year after the date of the enactment of this Act [July 21, 2010]."
1935—Act Aug. 23, 1935, among other changes, inserted "except upon such conditions and in accordance with such rules and regulations as may be prescribed by the said Board" to second sentence and proviso.
Pub. L. 89–597, §7, Sept. 21, 1966, 80 Stat. 825, as amended, formerly set out as an Effective and Termination Dates of 1966 Amendment note under section 461 of this title (which provided in part that amendment of this section by section 2(c) of Pub. L. 89–597 was effective only to Dec. 15, 1980, and that on Dec. 15, 1980, this section was amended to read as it would without the amendment by section 2(c) of Pub. L. 89–597), was repealed by Pub. L. 96–221, title II, §207(a), Mar. 31, 1980, 94 Stat. 144.
Pub. L. 96–221, title V, §529, Mar. 31, 1980, 94 Stat. 168, provided in part that the repeal of this section is effective at the close of Mar. 31, 1980.
Pub. L. 96–221, title V, §529, Mar. 31, 1980, 94 Stat. 168, provided in part that, notwithstanding the repeal of Pub. L. 96–104 and title II of Pub. L. 96–161, this section [which had been enacted by those laws] shall continue to apply to any loan made, any deposit made, or any obligation issued in any State during any period when this section was in effect in such State.
Prior to repeal by Pub. L. 96–221, title V, §529, Mar. 31, 1980, 94 Stat. 168, it was provided by Pub. L. 96–161, title II, §211, Dec. 28, 1979, 93 Stat. 1239, that: "The amendments made by sections 208, 209, and 210 of this title [enacting this section and amending sections 1425b and 1828 of this title] shall apply only with respect to deposits made or obligations issued in any State during the period beginning on the date of the enactment of this Act [Dec. 28, 1979] and ending on the earliest of—
"(1) in the case of a State statute, July 1, 1980;
"(2) the date, after the date of the enactment of this Act [Dec. 28, 1979], on which such State adopts a law stating in substance that such State does not want the amendments made by sections 208, 209, and 210 of this title to apply with respect to such deposits and obligations; or
"(3) the date on which such State certifies that the voters of such State, after the date of the enactment of this Act [Dec. 28, 1979], have voted in favor of, or to retain, any law, provision of the constitution of such state, or amendment to the constitution of such State which limits the amount of interest which may be charged in connection with such deposits and obligations."
Prior to its repeal by Pub. L. 96–161, title II, §212, Dec. 28, 1979, 93 Stat. 1239, it was provided by Pub. L. 96–104, title II, §204, Nov. 5, 1979, 93 Stat. 793, that: "The amendments made by this title [enacting this section and amending sections 1425b and 1828 of this title] shall apply only with respect to deposits made or obligations issued in any State during the period beginning on the date of the enactment of this Act [Nov. 5, 1979] and ending on the earlier of—
"(1) July 1, 1981;
"(2) the date, after the date of the enactment of this Act [Nov. 5, 1979], on which such State adopts a law stating in substance that such State does not want the amendments made by this title to apply with respect to such deposits and obligations; or
"(3) the date on which such State certifies that the voters of such State, after the date of the enactment of this Act [Nov. 5, 1979], have voted in favor of, or to retain, any law, provision of the constitution of such State, or amendment to the constitution of such State which limits the amount of interest which may be charged in connection with such deposits and obligations."
Prior to repeal by Pub. L. 96–104, §1, Nov. 5, 1979, 93 Stat. 789, it was provided by Pub. L. 93–501, title III, §304, Oct. 29, 1974, 88 Stat. 1561, that: "The amendments made by this title [which enacted this section and amended sections 1425b and 1828 of this title] shall apply to any deposit made or obligation issued in any State after the date of enactment of this title [Oct. 29, 1974], but prior to the earlier of (1) July 1, 1977 or (2) the date (after such date of enactment) on which the State enacts a provision of law which limits the amount of interest which may be charged in connection with deposits or obligations referred to in the amendments made by this title."
Pub. L. 96–161, title II, §213, Dec. 28, 1979, 93 Stat. 1240, provided that the provisions of title II of Pub. L. 96–161, which enacted this section, repealed former section 371b–1 of this title, and enacted provisions set out as a note under this section, continued to apply until July 1, 1981, in the case of any State having a constitutional provision regarding maximum interest rates.
(b) Aggregate limits on insured depository institutions' exposure to other depository institutions
(c) "Exposure" defined
For purposes of subsection (b), an insured depository institution's "exposure" to another depository institution means—
The Board may, at its discretion, by regulation or order, exempt transactions from the definition of "exposure" if it finds the exemptions to be in the public interest and consistent with the purpose of this section.
For purposes of this section, the term "insured depository institution" has the same meaning as in section 1813 of this title.
Pub. L. 102–242, title III, §308(c), Dec. 19, 1991, 105 Stat. 2363, provided that: "The amendment made by this section [enacting this section] shall become effective 1 year after the date of enactment of this Act [Dec. 19, 1991]."
Pub. L. 102–242, title III, §308(b), Dec. 19, 1991, 105 Stat. 2362, provided that: "The Board shall prescribe reasonable transition rules to facilitate compliance with section 23 of the Federal Reserve Act [12 U.S.C. 371b–2] (as added by subsection (a))."
(1) the term "affiliate" with respect to a member bank means—
(D) any investment fund with respect to which a member bank or affiliate thereof is an investment adviser; and
(7) the term "covered transaction" means with respect to an affiliate of a member bank—
(G) a derivative transaction, as defined in paragraph (3) of section 84(b) of this title, with an affiliate, to the extent that the transaction causes a member bank or a subsidiary to have credit exposure to the affiliate;
(iii) notes, drafts, bills of exchange or bankers' acceptances that are eligible for rediscount or purchase by a Federal Reserve Bank; or
The provisions of this section, except paragraph (a)(4),1 shall not be applicable to—
For purposes of this section and section 371c–1 of this title, the term "financial subsidiary" means any company that is a subsidiary of a bank that would be a financial subsidiary of a national bank under section 24a of this title.
(3) Anti-evasion provision
(2)(A) In general.—The Board may, at its discretion, by regulation exempt transactions or relationships from the requirements of this section if—
(i) National banks.—The Comptroller of the Currency may, by order, exempt a transaction of a national bank from the requirements of this section if—
(ii) State banks.—The Federal Deposit Insurance Corporation may, by order, exempt a transaction of a State nonmember bank, and the Board may, by order, exempt a transaction of a State member bank, from the requirements of this section if—
(4) Amounts of covered transactions.—The Board may issue such regulations or interpretations as the Board determines are necessary or appropriate with respect to the manner in which a netting agreement may be taken into account in determining the amount of a covered transaction between a member bank or a subsidiary and an affiliate, including the extent to which netting agreements between a member bank or a subsidiary and an affiliate may be taken into account in determining whether a covered transaction is fully secured for purposes of subsection (d)(4). An interpretation under this paragraph with respect to a specific member bank, subsidiary, or affiliate shall be issued jointly with the appropriate Federal banking agency for such member bank, subsidiary, or affiliate.
This chapter, referred to in subsec. (e)(4)(B), was in the original "this Act", meaning act Dec. 23, 1913, ch. 6, 38 Stat. 251, as amended, known as the Federal Reserve Act. For complete classification of this act to the Code, see References in Text note set out under section 226 of this title and Tables.
2010—Subsec. (b)(1)(D). Pub. L. 111–203, §608(a)(1)(A), added subpar. (D) and struck out former subpar. (D) which read as follows:
"(i) any company, including a real estate investment trust, that is sponsored and advised on a contractual basis by the member bank or any subsidiary or affiliate of the member bank; or
"(ii) any investment company with respect to which a member bank or any affiliate thereof is an investment advisor as defined in section 80a–2(a)(20) of title 15; and".
Subsec. (b)(7)(A). Pub. L. 111–203, §608(a)(1)(B)(i), inserted ", including a purchase of assets subject to an agreement to repurchase" before semicolon at end.
Subsec. (b)(7)(C). Pub. L. 111–203, §608(a)(1)(B)(ii), struck out ", including assets subject to an agreement to repurchase," after "purchase of assets".
Subsec. (b)(7)(D). Pub. L. 111–203, §608(a)(1)(B)(iii)(I), inserted "or other debt obligations" after "acceptance of securities".
Subsec. (b)(7)(F), (G). Pub. L. 111–203, §608(a)(1)(B)(iii)(II), (iv), added subpars. (F) and (G).
Subsec. (c)(1). Pub. L. 111–203, §608(a)(2)(A)(i), substituted "subsidiary, and any credit exposure of a member bank or a subsidiary to an affiliate resulting from a securities borrowing or lending transaction, or a derivative transaction, shall be secured at all times" for "subsidiary shall be secured at the time of the transaction" in introductory provisions.
Subsec. (c)(1)(A) to (D). Pub. L. 111–203, §608(a)(2)(A)(ii), substituted "letter of credit, or credit exposure" for "or letter of credit".
Subsec. (c)(2). Pub. L. 111–203, §608(a)(2)(D), inserted ", or credit exposure to an affiliate resulting from a securities borrowing or lending transaction, or derivative transaction" before period at end.
Pub. L. 111–203, §608(a)(2)(B), (C), redesignated par. (3) as (2) and struck out former par. (2) which read as follows: "Any such collateral that is subsequently retired or amortized shall be replaced by additional eligible collateral where needed to keep the percentage of the collateral value relative to the amount of the outstanding loan or extension of credit, guarantee, acceptance, or letter of credit equal to the minimum percentage required at the inception of the transaction."
Subsec. (c)(3). Pub. L. 111–203, §608(a)(2)(E), inserted "or other debt obligations" after "securities" and substituted "guarantee, acceptance, or letter of credit issued on behalf of, or credit exposure from a securities borrowing or lending transaction, or derivative transaction to," for "or guarantee, acceptance, or letter of credit issued on behalf of,".
Pub. L. 111–203, §608(a)(2)(C), redesignated par. (4) as (3). Former par. (3) redesignated (2).
Subsec. (c)(4), (5). Pub. L. 111–203, §608(a)(2)(C), redesignated par. (5) as (4). Former par. (4) redesignated (3).
Subsec. (d)(4). Pub. L. 111–203, §608(a)(3), substituted "issuing a guarantee, acceptance, or letter of credit on behalf of, or having credit exposure resulting from a securities borrowing or lending transaction, or derivative transaction to," for "or issuing a guarantee, acceptance, or letter of credit on behalf of," in introductory provisions.
Subsec. (e)(3), (4). Pub. L. 111–203, §609(a), redesignated par. (4) as (3) and struck out former par. (3). Prior to amendment, text of par. (3) read as follows:
"(A) Exception from limit on covered transactions with any individual financial subsidiary.—Notwithstanding paragraph (2), the restriction contained in subsection (a)(1)(A) of this section shall not apply with respect to covered transactions between a bank and any individual financial subsidiary of the bank.
"(B) Exception for earnings retained by financial subsidiaries.—Notwithstanding paragraph (2) or subsection (b)(7) of this section, a bank's investment in a financial subsidiary of the bank shall not include retained earnings of the financial subsidiary."
Subsec. (f)(2). Pub. L. 111–203, §608(a)(4)(A)(iii), which directed "striking the Board and inserting" subpar. (A) designation and heading, followed by "The Board", was executed by inserting subpar. (A) designation and heading before "The Board" as it appeared, to reflect the probable intent of Congress.
Pub. L. 111–203, §608(a)(4)(A)(ii), substituted "if—" for "if it finds such exemptions to be in the public interest and consistent with the purposes of this section." and added cls. (i) and (ii).
Pub. L. 111–203, §608(a)(4)(A)(i), struck out "or order" after "regulation".
Subsec. (f)(2)(B). Pub. L. 111–203, §608(a)(4)(A)(iv), added subpar. (B).
Subsec. (f)(4). Pub. L. 111–203, §608(a)(4)(B), added par. (4).
1983—Subsec. (d)(1). Pub. L. 97–457, §22(1), substituted "subject to the prohibition contained in subsection (a)(3)" for "except for the purchase of a low-quality asset which is prohibited".
Subsec. (d)(6). Pub. L. 97–457, §22(2), inserted ", subject to the prohibition contained in subsection (a)(3)," after "market quotation or".
"No member bank shall (1) make any loan or any extension of credit to, or purchase securities under repurchase agreement from, any of its affiliates, or (2) invest any of its funds in the capital stock, bonds, debentures, or other such obligations of any such affiliate, or (3) accept the capital stock, bonds, debentures, or other such obligations of any such affiliate as collateral security for advances made to any person, partnership, association, or corporation, if, in the case of any such affiliate, the aggregate amount of such loans, extensions of credit, repurchase agreements, investments, and advances against such collateral security will exceed 10 per centum of the capital stock and surplus of such member bank, or if, in the case of all such affiliates, the aggregate amount of such loans, extensions of credits, repurchase agreements, investments, and advances against such collateral security will exceed 20 per centum of the capital stock and surplus of such member bank.
"Within the foregoing limitations, each loan or extension of credit of any kind or character to an affiliate shall be secured by collateral in the form of stocks, bonds, debentures, or other such obligations having a market value at the time of making the loan or extension of credit of at least 20 per centum more than the amount of the loan or extension of credit, or of at least 10 per centum more than the amount of the loan or extension of credit if it is secured by obligations of any State or of any political subdivision or agency thereof: Provided, That the provisions of this paragraph shall not apply to loans or extensions of credit secured by obligations of the United States Government, the Federal intermediate credit banks, the Federal land banks, or the Federal Home Loan Banks, or by such notes, drafts, bills of exchange, or bankers' acceptances as are eligible for rediscount or for purchase by Federal Reserve Banks. A loan or extension of credit to a director, officer, clerk, or other employee, or any representative of any such affiliate, shall be deemed a loan to the affiliate to the extent that the proceeds of such loan are used for the benefit of or transferred to the affiliate.
"The provisions of this section shall not apply to any affiliate (1) engaged solely in holding the bank premises of the member bank with which it is affiliated; (2) engaged solely in conducting a safe-deposit business or the business of an agricultural credit corporation or livestock loan company; (3) in the capital stock of which a national banking association is authorized to invest pursuant to section 25 of this Act, as amended [12 U.S.C. 601 et seq.], or a subsidiary of such affiliate, all the stock of which (except qualifying shares of directors in an amount not to exceed 10 per centum) is owned by such affiliate; (4) organized under section 25(a) of this Act, as amended [12 U.S.C. 611 et seq.], of this title, or a subsidiary of such affiliate, all the stock of which (except qualifying shares of directors in an amount not to exceed 10 per centum) is owned by such affiliate; (5) engaged solely in holding obligations of the United States or obligations fully guaranteed by the United States as to principal and interest, the Federal intermediate credit banks, the Federal land banks, the Federal Home Loan Banks; (6) where the affiliate relationship has arisen out of a bona fide debt contracted prior to the date of the creation of such relationship; or (7) where the affiliate relationship exists by reason of the ownership or control of any voting shares thereof by a member bank as executor, administrator, trustee, receiver, agent, depositary, or in any other fiduciary capacity, except where such shares are held for the benefit of all or a majority of the stockholders of such member bank; but as to any such affiliate, member banks shall continue to be subject to other provisions of law applicable to loans by such banks and investments by such banks in stocks, bonds, debentures, or other such obligations. The provisions of this section shall likewise not apply to indebtedness of any affiliate for unpaid balances due a bank on assets purchased from such bank or to loans secured by, or extensions of credit against, obligations of the United States or obligations fully guaranteed by the United States as to principal and interest.
"For the purposes of this section, (1) the term 'extension of credit' and 'extensions of credit' shall be deemed to include (A) any purchase of securities, other assets or obligations under repurchase agreement, and (B) the discount of promissory notes, bills of exchange, conditional sales contracts, or similar paper, whether with or without recourse, except that the acquisition of such paper by a member bank from another bank, without recourse, shall not be deemed to be a 'discount' by such member bank for such other bank; and (2) noninterest-bearing deposits to the credit of a bank shall not be deemed to be a loan or advance or extension of credit to the bank of deposit, nor shall the giving of immediate credit to a bank upon uncollected items received in the ordinary course of business be deemed to be a loan or advance or extension of credit to the depositing bank.
"For the purposes of this section, the term 'affiliate' shall include, with respect to any member bank, any bank holding company of which such member bank is a subsidiary within the meaning of the Bank Holding Company Act of 1956, as amended [12 U.S.C. 1841 et seq.], and any other subsidiary of such company.
"The provisions of this section shall not apply to (1) stock, bonds, debentures, or other obligations of any company of the kinds described in section 4(c)(1) of the Bank Holding Company Act of 1956, as amended [12 U.S.C. 1843(c)(1)]; (2) stock, bonds, debentures, or other obligations accepted as security for debts previously contracted, provided that such collateral shall not be held for a period of over two years; (3) shares which are of the kinds and amounts eligible for investment by national banks under the provisions of section 24 of this title; (4) any extension of credit by a member bank to a bank holding company of which such bank is a subsidiary or to another subsidiary of such bank holding company, if made within one year after July 1, 1966, and pursuant to a contract lawfully entered into prior to January 1, 1966; or (5) any transaction by a member bank with another bank the deposits of which are insured by the Federal Deposit Insurance Corporation, if more than 50 per centum of the voting stock of such other bank is owned by the member bank or held by trustees for the benefit of the shareholders of the member bank."
1966—Pub. L. 89–485 added last three pars. and struck out from third par. introductory statement that term "affiliate" shall include holding company affiliates as well as other affiliates, respectively. Such added pars. make "extension of credit" cover all purchases under repurchase agreements and the discount of promissory notes, bills of exchange, conditional sales contracts, or similar paper, whether with or without recourse, excluding therefrom such discounts by one bank for another, if without recourse, exclude from being deemed a loan, advance, or extension of credit noninterest bearing deposits to the credit of a bank or the giving of immediate credit to a bank for uncollected items received in the ordinary course of business, define term "affiliate" (superseding one stricken from par. three), and exempt stocks, bonds, debentures, or other obligations of companies described in section 4(c)(1) of the Bank Holding Company Act of 1956, as amended; or accepted as security for debts previously contracted, shares of the kind and amounts eligible for investment by national banks under section 24 of this title, loans by a bank to its holding company or a fellow subsidiary if made within one year after July 1, 1966 and pursuant to a contract lawfully entered before Jan. 1, 1966, and transactions between a member bank and a majority-owned insured bank.
1959—Pub. L. 86–230 struck out from second and third pars. references to Home Owners' Loan Corporation after Federal Home Loan Banks.
1954—Act June 30, 1954, amended third par. substituting "solely" for "on June 16, 1934" after "(1) engaged" and struck out "or in maintaining and operating properties acquired for banking purposes prior to such date" after "is affiliated".
Pub. L. 111–203, title VI, §608(d), July 21, 2010, 124 Stat. 1611, provided that: "The amendments made by this section [amending this section and sections 371c–1 and 1468 of this title] shall take effect 1 year after the transfer date."
[For definition of "transfer date" as used in section 608(d) of Pub. L. 111–203, set out above, see section 5301 of this title.]
"(b) Prospective Application of Amendment.—The amendments made by this section [amending this section] shall apply with respect to any covered transaction between a bank and a subsidiary of the bank, as those terms are defined in section 23A of the Federal Reserve Act (12 U.S.C. 371c), that is entered into on or after the date of enactment of this Act [July 21, 2010].
"(c) Effective Date.—The amendments made by this section shall take effect 1 year after the transfer date."
[For definition of "transfer date" as used in section 609(b), (c) of Pub. L. 111–203, set out above, see section 5301 of this title.]
Pub. L. 97–320, title IV, §410(c), Oct. 15, 1982, 96 Stat. 1520, provided that: "Section 23A of the Federal Reserve Act, as amended by this section [this section], shall apply to any transaction entered into after the date of enactment of this Act [Oct. 15, 1982], except for transactions which are the subject of a binding written contract or commitment entered into on or before July 28, 1982, and except that any renewal of a participation in a loan outstanding on July 28, 1982, to a company that becomes an affiliate as a result of the enactment of this Act [see section 1 of Pub. L. 97–320, set out as a Short Title of 1982 Amendments note under section 226 of this title], or any participation in a loan to such an affiliate emanating from the renewal of a binding written contract or commitment outstanding on July 28, 1982, shall not be subject to the collateral requirements of this Act."
1 So in original. Probably should read "subsection (a)(4),".
(A) the term "security" has the meaning given to such term in section 78c(a)(10) of title 15; and
(B) the term "principal underwriter" means any underwriter who, in connection with a primary distribution of securities—
(1) the term "affiliate" has the meaning given to such term in section 371c of this title (but does not include any company described in section 1 (b)(2) of such section or any bank);
(2) the terms "bank", "subsidiary", "person", and "security" (other than security as used in subsection (b)) have the meanings given to such terms in section 371c of this title; and
(3) the term "covered transaction" has the meaning given to such term in section 371c of this title (but does not include any transaction which is exempt from such definition under subsection (d) of such section).
(B) subject to paragraph (2), if the Board finds that an exemption or exclusion is in the public interest and is consistent with the purposes of this section, and notifies the Federal Deposit Insurance Corporation of such finding, regulations to—
2010—Subsec. (e). Pub. L. 111–203, §608(b)(1)–(4), designated existing provisions as par. (1) and inserted heading, redesignated former pars. (1) and (2) as subpars. (A) and (B), respectively, of par. (1), redesignated former subpars. (A) and (B) of par. (2) as cls. (i) and (ii), respectively, of par. (1)(B), realigned margins, and struck out concluding provisions which read as follows: "if the Board finds such exemptions or exclusions are in the public interest and are consistent with the purposes of this section."
Subsec. (e)(1)(B). Pub. L. 111–203, §608(b)(5)(A), inserted "subject to paragraph (2), if the Board finds that an exemption or exclusion is in the public interest and is consistent with the purposes of this section, and notifies the Federal Deposit Insurance Corporation of such finding," before "regulations" in introductory provisions.
Subsec. (e)(1)(B)(ii). Pub. L. 111–203, §608(b)(5)(B), substituted period for comma at end.
Subsec. (e)(2). Pub. L. 111–203, §608(b)(6), added par. (2).
1999—Subsec. (b)(2). Pub. L. 106–102 amended text of par. (2) generally. Prior to amendment, text read as follows: "Subparagraph (B) of paragraph (1) shall not apply if the purchase or acquisition of such securities has been approved, before such securities are initially offered for sale to the public, by a majority of the directors of the bank who are not officers or employees of the bank or any affiliate thereof."
(1) the term "affiliate" has the same meaning as in section 221a of this title; and
(2) the term "well capitalized" has the same meaning as in section 1831o(b) of this title.
1996—Pub. L. 104–208 inserted section catchline and amended text generally. Prior to amendment, text read as follows: "No national bank, without the approval of the Comptroller of the Currency, and no State member bank, without the approval of the Board of Governors of the Federal Reserve System, shall (1) invest in bank premises, or in the stock, bonds, debentures, or other such obligations of any corporation holding the premises of such bank, or (2) make loans to or upon the security of the stock of any such corporation, if the aggregate of all such investments and loans, together with the amount of any indebtedness incurred by any such corporation which is an affiliate of the bank, as defined in section 221a of this title, will exceed the amount of the capital stock of such bank."
1954—Act June 30, 1954, inserted "together with the amount of any indebtedness incurred by any such corporation which is an affiliate of the bank, as defined in section 221a of this title".
§372. Bankers' acceptances
Any member bank and any Federal or State branch or agency of a foreign bank subject to reserve requirements under section 3105 of this title (hereinafter in this section 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—
Except as provided in subsection (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 subsection (h).
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 subsection (h).
Notwithstanding subsections (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 section.
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 subsection (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.
The seventh par. of section 13 of the Federal Reserve Act [this section] as amended in 1982 by Pub. L. 97–290 contained lettered subpars. (A) through (H). For purposes of codification those lettered subpars. (A) through (H) have been translated as subsecs. (a) through (h), "paragraph" has been translated as "section", and "subparagraph" has been translated as "subsection".
Subsec. (b). Pub. L. 97–290 designated second independent clause of second sentence of existing provisions as subsec. (b), substituted "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" for "no bank shall accept such bills to an amount equal at any time in the aggregate to more than one-half of its paid-up and unimpaired capital stock and surplus" and inserted provisions relating to a United States branch or agency of a foreign bank.
Subsec. (d). Pub. L. 97–290 designated second proviso of second sentence of existing provisions as subsec. (d), substituted "Notwithstanding subsections (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 section." for "Provided further, That the aggregate of acceptances growing out of domestic transactions shall in no event exceed 50 per centum of such capital stock and surplus."
Subsec. (e). Pub. L. 97–290 designated first independent clause of second sentence of existing provisions as subsec. (e), substituted "institution" for "member bank" and "bank" and "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" for "accept, whether in a foreign or domestic transaction, for any one person, company, firm, or corporation to an amount", and inserted provisions relating to a United States branch or agency of a foreign bank.
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 1 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.
2010—Pub. L. 111–203 substituted "[Reserved]" for text, which related to purchases from directors and sales to directors.
Pub. L. 111–203, title VI, §615(c), July 21, 2010, 124 Stat. 1615, provided that: "The amendments made by this section [amending this section and section 1828 of this title] shall take effect on the transfer date."
1994—Par. (2). Pub. L. 103–325 in introductory provisions substituted "A member" for "With the specific prior approval of its board of directors, a member".
1982—Par. (2). Pub. L. 97–320, §421(a), struck out "not exceeding $60,000" after "may make a loan".
Par. (3). Pub. L. 97–320, §421(a), struck out ", not exceeding the aggregate amount of $20,000 outstanding at any one time," after "officer of the bank".
Par. (4). Pub. L. 97–320, §421(b), substituted "in an amount prescribed in a regulation of the member bank's appropriate Federal banking agency" for "not exceeding the aggregate amount of $10,000 outstanding at any one time".
1978—Par. (2). Pub. L. 95–630 substituted "$60,000" for "$30,000".
Par. (3). Pub. L. 95–630 substituted "$20,000" for "$10,000".
Par. (4). Pub. L. 95–630 substituted "$10,000" for "$5,000".
Par. (5). Pub. L. 90–44 substituted provisions, designated as par. (5), for extension of credit to partnerships for former provisions of third sentence that "Borrowing by, or loaning to, a partnership in which one or more executive officers of a member bank are partners having either individually or together a majority interest in said partnership, shall be considered within the prohibition of this section".
Par. (10). Pub. L. 90–44 designated provisions of fifth sentence as par. (10) and substituted general authorization for definition of terms for former specific authorization for definition of "executive officer" and for determination what shall be deemed to be a borrowing, indebtedness, loan, or extension of credit.
1939—Act June 20, 1939, substituted "June 16, 1939," for "from such date", in first sentence.
1938—Par. (1). Act Apr. 25, 1938, substituted "six" for "five" in first sentence.
A member bank may extend credit to any executive officer, director, or principal shareholder, or to any related interest of such a person, if the extension of credit is in an amount that, when aggregated with the amount of all outstanding extensions of credit by that bank to its executive officers, directors, principal shareholders, and those persons' related interests would not exceed the bank's unimpaired capital and unimpaired surplus.
The Board may, by regulation, make exceptions to subparagraph (A) for member banks with less than $100,000,000 in deposits if the Board determines that the exceptions are important to avoid constricting the availability of credit in small communities or to attract directors to such banks. In no case may the aggregate amount of all outstanding extensions of credit to a bank's executive officers, directors, principal shareholders, and those persons' related interests be more than 2 times the bank's unimpaired capital and unimpaired surplus.
Except as provided in clause (ii), the term "company" means any corporation, partnership, business or other trust, association, joint venture, pool syndicate, sole proprietorship, unincorporated organization, or other business entity.
The term "company" does not include—
A person is an "executive officer" of a company or bank if that person participates or has authority to participate (other than as a director) in major policymaking functions of the company or bank.
A member bank extends credit to a person by—
(II) having credit exposure to the person arising from a derivative transaction (as defined in section 84(b) of this title), repurchase agreement, reverse repurchase agreement, securities lending transaction, or securities borrowing transaction between the member bank and the person.
The term "member bank" includes any subsidiary of a member bank.
The term "principal shareholder"—
A "related interest" of a person is—
The term "subsidiary" has the same meaning as in section 1841 of this title.
(Dec. 23, 1913, ch. 6, §22(h), as added Pub. L. 95–630, title I, §104, Nov. 10, 1978, 92 Stat. 3644; amended Pub. L. 97–320, title IV, §§410(e), 422, Oct. 15, 1982, 96 Stat. 1520, 1522; Pub. L. 102–242, title III, §306(a)–(h), Dec. 19, 1991, 105 Stat. 2355, 2357-2359; Pub. L. 102–550, title IX, §955, title XVI, §1605(a)(10), Oct. 28, 1992, 106 Stat. 3895, 4086; Pub. L. 103–325, title III, §334(b), Sept. 23, 1994, 108 Stat. 2233; Pub. L. 104–208, div. A, title II, §2211, Sept. 30, 1996, 110 Stat. 3009–410; Pub. L. 111–203, title VI, §614(a), July 21, 2010, 124 Stat. 1614.)
2010—Subsec. (9)(D)(i). Pub. L. 111–203 substituted "extends credit to a person by—" for "extends credit by making", inserted "(I) making" before "or renewing", substituted "which the person" for "which a person" and "the bank; or" for "the bank.", and added subcl. (II).
Par. (8)(B). Pub. L. 104–208, §2211(b), amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: "The Board may, by regulation, make exceptions to subparagraph (A), except as that subparagraph makes applicable paragraph (2), for an executive officer or director of a subsidiary of a company that controls the member bank, if that executive officer or director does not have authority to participate, and does not participate, in major policymaking functions of the member bank."
1992—Par. (6)(B)(i). Pub. L. 102–550, §1605(a)(10), substituted "or" for "and" at end.
Par. (9)(F). Pub. L. 102–550, §955(b), designated portion of existing provisions as cl. (i), realigned margin, substituted "; and" for period at end, and added cl. (ii).
Par. (1). Pub. L. 102–242, §306(d)(2), inserted "(5)," after "(4),".
Par. (4). Pub. L. 102–242, §306(c), inserted ", director," after "executive officer" in heading and text.
Par. (8). Pub. L. 102–242, §306(f), struck out "bank holding" before "company of which the member".
Par. (9)(F). Pub. L. 102–242, §306(h), struck out last sentence of subpar. (F) which read as follows: "For purposes of paragraph (4), if a member bank has its main banking office in a city, town, or village with a population of less than 30,000, the preceding sentence shall apply with '18 percent' substituted for '10 percent'."
1982—Par. (2). Pub. L. 97–320, §422, substituted "an amount prescribed in a regulation of the appropriate Federal banking agency" for "$25,000".
Par. (6)(C) to (F). Pub. L. 97–320, §410(e), redesignated subpars. (D) to (G) as (C) to (F), respectively. Former subpar. (C), relating to definition of term "extension of credit", was struck out.
Pub. L. 111–203, title VI, §614(b), July 21, 2010, 124 Stat. 1614, provided that: "The amendments made by this section [amending this section] shall take effect 1 year after the transfer date."
[For definition of "transfer date" as used in section 614(b) of Pub. L. 111–203, set out above, see section 5301 of this title.]
Pub. L. 102–242, title III, §306(l), Dec. 19, 1991, 105 Stat. 2360, provided that: "The amendments made by this section [amending this section and sections 1468, 1828, and 1972 of this title] shall become effective upon the earlier of—
"(1) the date on which final regulations under subsection (m)(1) [set out below] become effective [May 18, 1992, see 57 F.R. 22417]; or
"(2) 150 days after the date of enactment of this Act [Dec. 19, 1991]."
Pub. L. 95–630, title XXI, §2101, Nov. 10, 1978, 92 Stat. 3741, provided that: "Except as otherwise provided herein, this Act [see Short Title of 1978 Amendment note set out under section 226 of this title] shall take effect upon the expiration of one hundred and twenty days after the date of its enactment [Nov. 10, 1978]."
Pub. L. 102–242, title III, §306(m), Dec. 19, 1991, 105 Stat. 2360, provided that:
"(1) In general.—The Board of Governors of the Federal Reserve System shall, not later than 120 days after the date of enactment of this Act [Dec. 19, 1991], promulgate final regulations to implement the amendments made by this section [amending this section and sections 1468, 1828, and 1972 of this title], other than the amendments made by subsections (i) and (k) [amending sections 1468 and 1828 of this title].
"(2) Limiting extensions of credit to executive officers.—The Federal Deposit Insurance Corporation and Director of the Office of Thrift Supervision shall each, not later than 120 days after the date of enactment of this Act, promulgate final regulations prescribing the maximum amount that a nonmember insured bank or insured savings association (as the case may be) may lend under section 22(g)(4) of the Federal Reserve Act [12 U.S.C. 375a(4)], as made applicable to those institutions by subsections (k) and (i), respectively."
Pub. L. 102–242, title III, §306(n), Dec. 19, 1991, 105 Stat. 2360, provided that: "The amendments made by this section [amending this section and sections 1468, 1828, and 1972 of this title] do not affect the validity of any extension of credit or other transaction lawfully entered into on or before the effective date of those amendments [see Effective Date of 1991 Amendment note above]."
Pub. L. 102–242, title III, §306(o), Dec. 19, 1991, 105 Stat. 2360, provided that: "An executive officer or director of an insured depository institution, a bank holding company, or a savings and loan holding company, the shares of which are not publicly traded, shall report annually to the board of directors of the institution or holding company the outstanding amount of any credit that was extended to such executive officer or director and that is secured by shares of the institution or holding company."