§333 Mutual Savings Banks; Application and Admission to Membership in Federal Reserve System

Summary

Mutual savings banks that have no capital stock but do have surplus and retained earnings at least equal to the capital a national bank would need in the same place may apply to join the Federal Reserve System. They follow the same rules and process as State banks and trust companies, except each such savings bank must take Federal Reserve Bank stock equal to 0.6% (six-tenths of one percent) of its total deposit liabilities based on its most recent exam, and that amount is adjusted twice a year under Federal Reserve rules. If a bank’s charter does not let it buy Federal Reserve stock, it must deposit the same amount with the Federal Reserve Bank instead. That deposit is adjusted twice a year, has the same repayment rules as paid-in stock, and earns interest at the same rate as actual dividends on the Reserve Bank’s outstanding stock. If the bank’s laws later allow stock purchases, the deposit must be used to buy the stock. If the law is not changed at the next legislative session, or the bank fails to buy the stock within six months after the law changes, the bank will lose its membership and rights under the same procedures used for State member banks.