§330 Laws Applicable on Becoming Members; Discounts for State Banks

Summary

Banks that join the Federal Reserve must follow the rules in this subchapter and the parts of the chapter that apply to member banks, but they are not subject to examinations under sections 481 and 482. A state bank or trust company that becomes a member keeps its state charter, rights, and state-granted corporate powers. It gets member-bank privileges, but the Board of Governors can limit what state member banks and their subsidiaries may do under rules consistent with section 1831a. A Federal Reserve Bank must not discount notes, drafts, or bills of exchange for a state bank in a way that lets one borrower owe more than the amount that borrower could lawfully borrow if the bank were a national bank. Before discounting, the Federal Reserve Bank must get a certificate or guaranty that the borrower is not, and will not become, liable for more than that allowed amount while the items are discounted.