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

Summary

Banks wanting to join the Federal Reserve must have capital and extra funds that the Federal Reserve Board thinks are enough for the kinds of assets, deposits, and other responsibilities they have. A bank that takes deposits (not just trust funds) and does not meet the capital needed to open a national bank in that area can only join if it is, or has been, approved for deposit insurance under the Federal Deposit Insurance Act. State member banks cannot cut their capital stock without the Board’s prior permission.

Title 12, §329

Banks and Banking — Source: USLM XML via OLRC

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 [12 U.S.C. 1811 et seq.]. The capital stock of a State member bank shall not be reduced except with the prior consent of the Board.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Federal Deposit Insurance Act, referred to in text, is act Sept. 21, 1950, ch. 967, § 2, 64 Stat. 873, which is classified generally to chapter 16 (§ 1811 et seq.) of this title. For complete classification of this Act to the Code, see

Short Title

note set out under section 1811 of this title and Tables. Codification Section is comprised of the eleventh par. of section 9 of act Dec. 23, 1913, as amended. The eleventh par. constituted the ninth par. of section 9 in 1917 (40 Stat. 232), became the tenth par. in 1927 (44 Stat. 1229), and became the eleventh par. in 1950 (64 Stat. 458). For further details, see Codification note set out under section 321 of this title.

Amendments

1952—Act

July 15, 1952, vested in Board of Governors discretion with respect to admission of State banks to membership. 1933—Act

June 16, 1933, dropped alternative method of meeting the capital requirement and inserted proviso.

§329 Capital stock required as condition precedent to membership