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12 U.S.C. § 347a — Advances to member bank groups; inadequate amounts of eligible and acceptable assets; liability of individual banks in group; distribution of loans among banks of group; rate of interest; notes accepted for advances as collateral security for Federal reserve notes; foreign obligations as security for advances
Federal law — U.S. Code and appendices · legal_authorities
Upon receiving the consent of not less than five members of the Board of Governors of the Federal Reserve System, any Federal reserve bank may make advances, in such amount as the board of directors of such Federal reserve bank may determine, to groups of five or more member banks within its district, a majority of them independently owned and controlled, upon their time or demand promissory notes, provided the bank or banks which receive the proceeds of such advances as herein provided have no adequate amounts of eligible and acceptable assets available to enable such bank or banks to obtain sufficient credit accommodations from the Federal reserve bank through rediscounts or advances other than as provided in section 347b 11 See References in Text note below. of this title. The liability of the individual banks in each group must be limited to such proportion of the total amount advanced to such group as the deposit liability of the respective banks bears to the aggregate deposit liability of all banks in such group, but such advances may be made to a lesser number of such member banks if the aggregate amount of their deposit liability constitutes at least 10 per centum of the entire deposit liability of the member banks within such district. Such banks shall be authorized to distribute the proceeds of such loans to such of their number and in such amount as they may agree upon, but before so doing they shall require such recipient banks to deposit with a suitable trustee, representing the entire group, their individual notes made in favor of the group protected by such collateral security as may be agreed upon. Any Federal reserve bank making such advance shall charge interest or discount thereon at a rate not less than 1 per centum above its discount rate in effect
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Source file: Laws/federal/codes/united-states-code/title-12/section-347a-advances-to-member-bank-groups-inadequate-amounts-of-eligible-and-accept--bf6b542f92.md
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Source location: Title 12, Chapter 3, § 347a; chapter-003-federal-reserve-system.md
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Upon receiving the consent of not less than five members of the Board of Governors of the Federal Reserve System, any Federal reserve bank may make advances, in such amount as the board of directors of such Federal reserve bank may determine, to groups of five or more member banks within its district, a majority of them independently owned and controlled, upon their time or demand promissory notes, provided the bank or banks which receive the proceeds of such advances as herein provided have no adequate amounts of eligible and acceptable assets available to enable such bank or banks to obtain sufficient credit accommodations from the Federal reserve bank through rediscounts or advances other than as provided in section 347b 11 See References in Text note below. of this title. The liability of the individual banks in each group must be limited to such proportion of the total amount advanced to such group as the deposit liability of the respective banks bears to the aggregate deposit liability of all banks in such group, but such advances may be made to a lesser number of such member banks if the aggregate amount of their deposit liability constitutes at least 10 per centum of the entire deposit liability of the member banks within such district. Such banks shall be authorized to distribute the proceeds of such loans to such of their number and in such amount as they may agree upon, but before so doing they shall require such recipient banks to deposit with a suitable trustee, representing the entire group, their individual notes made in favor of the group protected by such collateral security as may be agreed upon. Any Federal reserve bank making such advance shall charge interest or discount thereon at a rate not less than 1 per centum above its discount rate in effect at the time of making such advance. No such note upon which advances are made by a Federal reserve bank under this section shall be eligible under [section 412 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section412&num=0&edition=prelim) as collateral security for Federal reserve notes.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** Any Federal Reserve bank, under rules and regulations prescribed by the Board of Governors of the Federal Reserve System, may make advances to any member bank on its time or demand notes having maturities of not more than four months and which are secured to the satisfaction of such Federal Reserve bank. Notwithstanding the foregoing, any Federal Reserve bank, under rules and regulations prescribed by the Board of Governors of the Federal Reserve System, may make advances to any member bank on its time notes having such maturities as the Board may prescribe and which are secured by mortgage loans covering a one-to-four family residence. Such advances shall bear interest at a rate equal to the lowest discount rate in effect at such Federal Reserve bank on the date of such note.
**(b) Limitations on advances**
(1) **Limitation on extended periods** — Except as provided in paragraph (2), no advances to any undercapitalized depository institution by any Federal Reserve bank under this section may be outstanding for more than 60 days in any 120-day period.
(2) **Viability exception**
(A) *In general* — If—
(i) the head of the appropriate Federal banking agency certifies in advance in writing to the Federal Reserve bank that any depository institution is viable; or
(ii) the Board conducts an examination of any depository institution and the Chairman of the Board certifies in writing to the Federal Reserve bank that the institution is viable,
the limitation contained in paragraph (1) shall not apply during the 60-day period beginning on the date such certification is received.
(B) *Extensions of period* — The 60-day period may be extended for additional 60-day periods upon receipt by the Federal Reserve bank of additional written certi
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Federal law — U.S. Code and appendices · legal_authorities
Any Federal Reserve bank may make application to the local Federal Reserve agent for such amount of the Federal Reserve notes hereinbefore provided for as it may require. Such application shall be accompanied with a tender to the local Federal Reserve agent of collateral in amount equal to the sum of the Federal Reserve notes thus applied for and issued pursuant to such application. The collateral security thus offered shall be notes, drafts, bills of exchange, or acceptances acquired under section 92, 342 to 348, 349 to 352, 361, 372, or 373 of this title, or bills of exchange endorsed by a member bank of any Federal Reserve district and purchased under the provisions of sections 348a and 353 to 359 of this title, or bankers’ acceptances purchased under the provisions of said sections 348a and 353 to 359 of this title, or gold certificates, or Special Drawing Right certificates, or any obligations which are direct obligations of, or are fully guaranteed as to principal and interest by, the United States or any agency thereof, or assets that Federal Reserve banks may purchase or hold under sections 348a and 353 to 359 of this title or any other asset of a Federal Reserve bank. In no event shall such collateral security be less than the amount of Federal Reserve notes applied for. The Federal Reserve agent shall each day notify the Board of Governors of the Federal Reserve System of all issues and withdrawals of Federal Reserve notes to and by the Federal Reserve bank to which he is accredited. The said Board of Governors of the Federal Reserve System may at any time call upon a Federal Reserve bank for additional security to protect the Federal Reserve notes issued to it. Collateral shall not be required for Federal Reserve notes which are held in the vaults of, or are
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Federal law — U.S. Code and appendices · legal_authorities
Page 126
TITLE 12—BANKS AND BANKING
§ 347a
1 See References in Text note below.
reserve bank may make advances for periods not
exceeding ninety days to its member banks on
their promissory notes secured by such notes,
drafts, bills of exchange, or bankers’ accept-
ances as are eligible for rediscount or for pur-
chase by Federal reserve banks under the provi-
sions of this chapter, or secured by such obliga-
tions as are eligible for purchase under section
355 of this title. All such advances shall be made
at rates to be established by such Federal re-
serve banks, such rates to be subject to the re-
view and determination of the Board of Gov-
ernors of the Federal Reserve System. If any
member bank to which any such advance has
been made shall, during the life or continuance
of such advance, and despite an official warning
of the reserve bank of the district or of the
Board of Governors of the Federal Reserve Sys-
tem to the contrary, increase its outstanding
loans secured by collateral in the form of
stocks, bonds, debentures, or other such obliga-
tions, or loans made to members of any orga-
nized stock exchange, investment house, or deal-
er in securities, upon any obligation, note, or
bill, secured or unsecured, for the purpose of
purchasing and/or carrying stocks, bonds, or
other investment securities (except obligations
of the United States) such advance shall be
deemed immediately due and payable, and such
member bank shall be ineligible as a borrower at
the reserve bank of the district under the provi-
sions of this section for such period as the Board
of Governors of the Federal Reserve System
shall determine: Provided, That no temporary
carrying or clearance loans made solely for the
purpose of facilitating the purchase or delivery
o
Source: Supplied 2024 U.S. Code historical extraction · 12 U.S.C. § 347a
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