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

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 examined under sections 481 and 482. They keep their state charter and the corporate powers granted by their state. They also get the same member-bank privileges, although the Board of Governors can limit the activities of state member banks and their subsidiaries under section 1831a. A Federal Reserve Bank cannot discount paper (like notes, drafts, or bills) for a state member bank from one borrower for more than the amount that bank could lawfully lend if it were a national bank. Before discounting, the Federal Reserve Bank must get a certificate or guarantee that the borrower is not and will not become liable for more than that allowed amount while the paper is under discount.

Title 12, §330

Banks and Banking — Source: USLM XML via OLRC

Banks becoming members of the Federal reserve system under authority of this subchapter shall be subject to the provisions of this subchapter and to those of this chapter which relate specifically to member banks, but shall not be subject to examination under the provisions of section 481 and 482 of this title. Subject to the provisions of this chapter and to the regulations of the board made pursuant thereto, any bank becoming a member of the Federal reserve system shall retain its full charter and statutory rights as a State bank or trust company, and may continue to exercise all corporate powers granted it by the State in which it was created, and shall be entitled to all privileges of member banks, except that the Board of Governors of the Federal Reserve System may limit the activities of State member banks and subsidiaries of State member banks in a manner consistent with section 1831a of this title. No Federal reserve bank shall be permitted to discount for any State bank or trust company notes, drafts, or bills of exchange of any one borrower who is liable for borrowed money to such State bank or trust company in an amount greater than that which could be borrowed lawfully from such State bank or trust company were it a national banking association. The Federal reserve bank, as a condition of the discount of notes, drafts, and bills of exchange for such State bank or trust company, shall require a certificate or guaranty to the effect that the borrower is not liable to such bank in excess of the amount provided by this subchapter, and will not be permitted to become liable in excess of this amount while such notes, drafts, or bills of exchange are under discount with the Federal reserve bank.

Notes & Related Subsidiaries

Editorial Notes

References in Text

This subchapter, referred to in text, was in the original “this section”, meaning section 9 of act Dec. 23, 1913, which is classified generally to this subchapter (§ 321 et seq.). This chapter, referred to in text, was in the original “this Act”, meaning act Dec. 23, 1913, ch. 6, 38 Stat. 251, known as the Federal Reserve Act. For complete classification of this Act to the Code, see

References in Text

note set out under section 226 of this title and Tables. Codification Section is comprised of the thirteenth par. of section 9 of act Dec. 23, 1913, as amended. The thirteenth par. constituted the tenth par. of section 9 in 1917 (40 Stat. 232), became the eleventh par. in 1927 (44 Stat. 1229), became the twelfth par. in 1935 (49 Stat. 704), and became the thirteenth par. in 1950 (64 Stat. 458). For further details, see Codification note set out under section 321 and 329 of this title.

Amendments

1991—Pub. L. 102–242 substituted “, except that the Board of Governors of the Federal Reserve System may limit the activities of State member banks and subsidiaries of State member banks in a manner consistent with section 1831a of this title. No Federal reserve bank” for “: Provided, however, That no Federal reserve bank”.

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

Summary

Title 12, §330

Notes & Related Subsidiaries

Editorial Notes

References in Text

References in Text

Amendments

Citations & Metadata