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Title 12, Banks and BankingRelease 119-102

§501 Liability of Federal Reserve or Member Bank for Certifying Check When Amount of Deposit Was Inadequate

Title 12 › CHAPTER 3 — FEDERAL RESERVE SYSTEM › SUBCHAPTER XVI — CIVIL LIABILITY OF FEDERAL RESERVE AND MEMBER BANKS, SHAREHOLDERS, AND OFFICERS › § 501

Last updated Aug 21, 2026|Official source

Summary

Bank officers, directors, agents, or employees must not certify a check unless the person or company who wrote the check has at least that amount on deposit at the bank when it is certified. A properly certified check counts as a valid debt the bank owes. If someone breaks this rule, the Board may impose penalties under subsection (h) of section 248; national member banks may face section 192; other member banks may face subchapter VIII of chapter 3.

Full Legal Text

Title 12, §501

Banks and Banking, Source: USLM XML via OLRC

It shall be unlawful for any officer, director, agent, or employee of any Federal reserve bank, or any member bank as defined in this chapter, to certify any check drawn upon such Federal reserve bank or member bank unless the person, firm, or corporation drawing the check has on deposit with such Federal reserve bank or member bank, at the time such check is certified, an amount of money not less than the amount specified in such check. Any check so certified by a duly authorized officer, director, agent, or employee shall be a good and valid obligation against such Federal reserve bank or member bank; but the act of any officer, director, agent, or employee of any such Federal reserve bank or member bank in violation of this section shall, in the discretion of the Board of Governors of the Federal Reserve System, subject such Federal reserve bank to the penalties imposed by subsection (h) of section 248 of this title, and shall subject such member banks, if a national bank, to the liability and proceedings on the part of the Comptroller of the Currency provided for in section 192 of this title, and shall, in the discretion of the Board of Governors of the Federal Reserve System, subject any other member bank to the penalties imposed by subchapter VIII of chapter 3 of this title for the violation of any of the provisions of this chapter.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

This chapter, referred to in text, was in the original “the act of December 23, 1913, known as the Federal Reserve Act,” and “said act,” respectively, meaning act Dec. 23, 1913, ch. 6, 38 Stat. 251. For complete classification of this Act to the Code, see

References in Text

note set out under section 226 of this title and Tables. Subchapter VIII of chapter 3 of this title, referred to in text, was in the original “section nine of said Federal reserve Act”. section 9 is classified generally to subchapter VIII (§ 321 et seq.) of chapter 3 of this title. Codification R.S. § 5208 derived from act Mar. 3, 1869, ch. 135, 15 Stat. 335. The last sentence of R.S. § 5208, as amended, which provided penalties for certification of certain checks, was repealed by section 21 of act June 25, 1948, ch. 645, 62 Stat. 862, 865, and the provisions thereof were reenacted as section 1004 of Title 18, Crimes and Criminal Procedure.

Amendments

1927—Act Feb. 25, 1927, substituted “deposited in the bank of the drawer thereof” after “regularly” in last sentence.

Statutory Notes and Related Subsidiaries

Change of Name

section 203(a) of act Aug. 23, 1935, changed name of Federal Reserve Board to Board of Governors of the Federal Reserve System.

Executive Documents

Exception as to

Transfer of Functions

Functions vested by any provision of law in Comptroller of the Currency, referred to in this section, not included in

Transfer of Functions

to Secretary of the Treasury, see note set out under section 1 of this title.

Reference

Citations & Metadata

Citation

12 U.S.C. § 501

Title 12, Banks and Banking

Last Updated

Aug 21, 2026

Release point: 119-102