Title 12 — Banks and BankingRelease 119-73
§374a Acting as agent for nonbanking borrower in making loans on securities to dealers in stocks, bonds, etc.; penalties
Title 12 › Chapter CHAPTER 3— - FEDERAL RESERVE SYSTEM › Subchapter SUBCHAPTER X— - POWERS AND DUTIES OF MEMBER BANKS › § 374a
Summary
A member bank must not act as agent for any nonbank when that nonbank borrows money secured by stocks, bonds, or other investment securities from brokers or dealers. If a bank breaks this rule, it may be fined up to $100 per day, and the Federal Reserve bank in that district can collect the fine by suit or other means.
Full Legal Text
Title 12, §374a
Banks and Banking — Source: USLM XML via OLRC
No member bank shall act as the medium or agent of any nonbanking corporation, partnership, association, business trust, or individual in making loans on the security of stocks, bonds, and other investment securities to brokers or dealers in stocks, bonds, and other investment securities. Every violation of this provision by any member bank shall be punishable by a fine of not more than $100 per day during the continuance of such violation; and such fine may be collected, by suit or otherwise, by the Federal reserve bank of the district in which such member bank is located.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Codification Section is comprised of subsec. (d), formerly seventh par., of section 19 of act Dec. 23, 1913, as redesignated by Pub. L. 89–597.
Reference
Citations & Metadata
Citation
12 U.S.C. § 374a
Title 12 — Banks and Banking
Last Updated
Apr 6, 2026
Release point: 119-73