§328 — Title 12 Banks and Banking | U.S. Code

Summary

A State bank or trust company may leave membership in a Federal Reserve Bank if it files six months’ written notice with the Board of Governors of the Federal Reserve System and turns in all its Federal Reserve Bank stock for cancellation. The Board can waive the six-month wait or let a bank leave sooner and can set conditions. A Federal Reserve Bank may not cancel more than 25% of its capital stock in one calendar year for voluntary withdrawals unless the Board gives express permission. Requests are handled in the order received. When a bank surrenders its stock (or is ordered to), its membership ends. After any debts to the Reserve Bank are covered, the bank gets back the cash it paid for the stock plus interest of one-half of 1% per month from the date of the last dividend (if earned), but the refund cannot exceed the stock’s book value. The bank also gets repayment of deposits and any other balances due.

Title 12, §328

Banks and Banking — Source: USLM XML via OLRC

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 25 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 1 per centum per month from 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.

Notes & Related Subsidiaries

Editorial Notes

Codification Section is comprised of the tenth par. of section 9 of act Dec. 23, 1913, as amended. The tenth par. constituted the eighth par. of section 9 in 1917 (40 Stat. 232), became the ninth par. in 1927 (44 Stat. 1229), and became the tenth par. in 1950 (64 Stat. 458). For further details, see Codification note set out under section 321 of this title.

Amendments

1930—Act Apr. 17, 1930, amended part of section preceding second proviso.

Statutory Notes and Related Subsidiaries

Change of Name

section 203(a) of act Aug. 23, 1935, changed name of Federal Reserve Board to Board of Governors of the Federal Reserve System.

§328 Withdrawals from membership