§287 Value of Shares of Stock; Increase and Decrease of Stock; Member Banks as Shareholders; Surrender of Shares

Summary

Each Federal Reserve bank must divide its capital into $100 shares. The total shares can go up when member banks raise their capital or when new banks join, and can go down when member banks cut capital or leave. Member banks cannot sell their Reserve Bank shares or use them as collateral. If a member bank raises its capital or surplus, it must buy extra Reserve Bank stock equal to 6% of that increase. Half of that must be paid right away as with the original purchase, and the other half can be called for payment later by the Board of Governors. A bank joining after the Reserve Bank is organized must buy stock equal to 6% of its paid-up capital and surplus, paying the par value plus 0.5% per month from the last dividend date. When a member bank cuts capital, leaves, or holds more stock than required, it must give up the right amount of Reserve Bank shares. If a bank voluntarily liquidates it must give up all its shares and is freed from any uncalled subscription. Canceled shares are paid for under rules set by the Board of Governors. The payment equals the cash actually paid on those shares plus 0.5% per month from the last dividend date, not more than the book value, and reduced by any amounts the bank owes the Reserve Bank.