An Act to authorize certain banks to invest in corporations whose purpose is to provide clerical services for them, and for other purposes
PL 87-856 (H.R.8874), enacted 10/23/1962

1132 
PUBLIC LAW 87-856-OCT. 23, 1962 
[76 STAT. 
October 23, 1962 
[H. R. 8874] 
Bank service 
corporations. 
Stock owner-
ship. 
Definitions. 
Public Law 87-856 
AN ACT 
To authorize certain banks to invest in corporations whose purpose is to provide 
clerical services for them, and for other purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled,) That for the pur-
poses of this Act— 
(a) The term "Federal supervisory agency" means the Comptroller 
of the Currency, the Board of Governors of the Federal Reserve Sys-
tem, or the Board of Directors of the Federal Deposit Insurance Cor-
poration. 
(b) The term "bank services" means services such as check and 
deposit sorting and posting, computation and posting of interest and 
other credits and charges, preparation and mailing of checks, state-
ments, notices, and similar items, or any other clerical, bookkeeping, 
accounting, statistical, or similar functions performed for a bank. 
(c) The term "bank service corporation" means a corporation 
organized to perform bank services for two or more banks, each of 
which owns part of the capital stock of such corporation, and at least 
one of which is subject to examination by a Federal supervisory 
agency. 
(d) The term "invest" includes any advance of funds to a bank 
service corporation, whether by the purchase of stock, the making of a 
loan, or otherwise, except a payment for rent earned, goods sold and 
delivered, or services rendered prior to the making of such payment. 
SEC. 2. (a) No limitation or prohibition otherwise imposed by any 
provision of Federal law exclusively relating to banks shall prevent 
any two or more banks from investing not more than 10 per centum 
of the paid-in and unimpaired capital and unimpaired surplus of 
each of them in a bank service corporation. 
(b) If stock in a bank service corporation has been held by two 
banks, and one of such banks ceases to utilize the services of the corpo-
ration and ceases to hold stock in it, and leaves the other as the sole 
stockholding bank, the corporation may nevertheless continue to func-
tion as such and the other bank may continue to hold stock in it. 
SEC. 3. Whenever a bank (referred to in this section as an "applying 
bank") subject to examination by a Federal supervisory agency applies 
for a type of bank services for itself from a bank service corporation 
which supplies the same type of bank services to another bank, and 
the applying bank is competitive with any bank (referred to in this 
section as a "stockholding bank") which holds stock in such corpora-
tion, the corporation must offer to supply such services by either— 
(1) issuing stock to the applying bank and furnishing bank 
services to it on the same basis as to the other banks holding stock 
in the corporation, or 
(2) furnishing bank services to the applying bank at rates no 
higher than necessary to fairly reflect the cost of such services, 
including the reasonable cost of the capital provided to the corpo-
ration by its stockholders, 
at the corporation's option, unless comparable services at competitive 
overall cost are available to the applying bank from another source, 
or unless the furnishing of the services sought by the applying bank 
would be beyond the practical capacity of the corporation. In any 
action or proceeding to enforce the duty imposed by this section, or for 
damages for the breach thereof, the burden shall be upon the bank 
service corporation to show such availability. 
SEC. 4. No bank service corporation may engage in any activity 
other than the performance of bank services for banks. 
76 STAT.] 
PUBLIC LAW 87-857-OCT. 23, 1962 
1133 
SEC. 5. (a) No bank subject to examination by a Federal supervisory 
agency may cause to be performed, by contract or otherwise, any bank 
services for itself, whether on or off its premises, unless assurances 
satisfactory to the agency prescribed in subsection (b) of this section 
are furnished to such agency by both the bank and the party perform-
ing such services that the performance thereof will be subject to regu-
lation and examination by such agency to the same extent as if such 
services were being performed by the bank itself on its own premises. 
(b) The assurances required by subsection (a) of this section shall 
be given, in the case of— 
(1) a national banking association or a bank operating under 
the code of laws for the District of Columbia, to the Comptroller 
of the Currency; 
(2) a bank (other than a bank described in paragraph (1)) 
which is a member of the Federal Keserve System, to the Board 
of Governors of the Federal Reserve System; and 
(3) a bank (other than a bank described in paragraph (1) or 
(2)) whose deposits are insured by the Federal Deposit Insurance 
Corporation, to the Board of Directors of the Federal Deposit 
Insurance Corporation. 
Approved October 23, 1962. 
Public Law 87-857 
AN ACT 
To amend the Policemen and Firemen's Retirement and Disability Act. 
October 23, 1962 
[H. R. 6836] 
Be it enacted hy the Senate aifid House of Representatives 
of the 
United States of America in dongress assembled^ That the Policemen 
and Firemen's Retirement and Disability Act, as amended by the Act 
approved August 21, 1957 (71 Stat. 394), is amended by designating 
subsection (g) as subsection (g)(1) and by inserting the following 
paragraph at the end of such subsection: 
" (2) In any case in which the proximate cause of an injury incurred 
or disease contracted by a member is doubtful, or is shown to be other 
than the performance of duty, and such injury or disease is shown to 
have been aggravated by the performance of duty to such an extent 
that the member is permanently disabled for the performance of duty, 
such disability shall be construed to have been incurred in the per-
formance of duty. 
The member shall, upon retirement for such dis-
ability, receive an annuity computed at the rate of 2 per centum of his 
basic salary at the time of his retirement for each year or portion 
thereof of his service: Provided^ That such annuity shall not exceed 70 
E
er centum of his basic salary at the time of retirement, nor shall it 
e less than 66% per centum of his basic salary at the time of 
retirement." 
Approved October 23, 1962. 
D. C. policemen 
and firemen. 
Disability re-
tirement. 
D.C. Code 4-
527.