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12 U.S.C. § 375a — Loans to executive officers of banks

Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 375a — Loans to executive officers of banks

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Source location: Title 12, Chapter 3, § 375a; chapter-003-federal-reserve-system.md

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(1) **General prohibition; authorization for extension of credit; conditions for credit** — Except as authorized under this section, no member bank may extend credit in any manner to any of its own executive officers. No executive officer of any member bank may become indebted to that member bank except by means of an extension of credit which the bank is authorized to make under this section. Any extension of credit under this section shall be promptly reported to the board of directors of the bank, and may be made only if— (A) the bank would be authorized to make it to borrowers other than its officers; (B) it is on terms not more favorable than those afforded other borrowers; (C) the officer has submitted a detailed current financial statement; and (D) it is on condition that it shall become due and payable on demand of the bank at any time when the officer is indebted to any other bank or banks on account of extensions of credit of any one of the three categories respectively referred to in paragraphs (2), (3), and (4) in an aggregate amount greater than the amount of credit of the same category that could be extended to him by the bank of which he is an officer. (2) **Mortgage loans** — A member bank may make a loan to any executive officer of the bank if, at the time the loan is made— (A) it is secured by a first lien on a dwelling which is expected, after the making of the loan, to be owned by the officer and used by him as his residence, and (B) no other loan by the bank to the officer under authority of this paragraph is outstanding. (3) **Educational loans** — A member bank may make extensions of credit to any executive officer of the bank to finance the education of the children of the officer. (4) **General limitation on amount of credit** — A member bank may make extensions of credit not otherwise specifically authorized under this section to any executive officer of the bank, in an amount prescribed in a regulation of the member bank’s appropriate Federal banking agency. (5) **Partnership loans** — Except to the extent permitted under paragraph (4), a member bank may not extend credit to a partnership in which one or more of its executive officers are partners having either individually or together a majority interest. For the purposes of paragraph (4), the full amount of any credit so extended shall be considered to have been extended to each officer of the bank who is a member of the partnership. (6) **Endorsement or guarantee of loans or assets; protective indebtedness** — This section does not prohibit any executive officer of a member bank from endorsing or guaranteeing for the protection of the bank any loan or other asset previously acquired by the bank in good faith or from incurring any indebtedness to the bank for the purpose of protecting the bank against loss or giving financial assistance to it. (7) **Continuation of violation** — Each day that any extension of credit in violation of this section exists is a continuation of the violation for the purposes of [section 1818 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1818&num=0&edition=prelim). (8) **Rules and regulations; definitions** — The Board of Governors of the Federal Reserve System may prescribe such rules and regulations, including definitions of terms, as it deems necessary to effectuate the purposes and to prevent evasions of this section.

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 1818 — Termination of status as insured depository institution

**(a) Termination of insurance** (1) **Voluntary termination** — Any insured depository institution which is not— (A) a national member bank; (B) a State member bank; (C) a Federal branch; (D) a Federal savings association; or (E) an insured branch which is required to be insured under subsection (a) or (b) 11 See References in Text note below. of [section 3104 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section3104&num=0&edition=prelim), may terminate such depository institution’s status as an insured depository institution if such insured institution provides written notice to the Corporation of the institution’s intent to terminate such status not less than 90 days before the effective date of such termination. (2) **Involuntary termination** (A) *Notice to primary regulator* — If the Board of Directors determines that— (i) an insured depository institution or the directors or trustees of an insured depository institution have engaged or are engaging in unsafe or unsound practices in conducting the business of the depository institution; (ii) an insured depository institution is in an unsafe or unsound condition to continue operations as an insured institution; or (iii) an insured depository institution or the directors or trustees of the insured institution have violated any applicable law, regulation, order, condition imposed in writing by the Corporation in connection with the approval of any application or other request by the insured depository institution, or written agreement entered into between the insured depository institution and the Corporation, the Board of Directors shall notify the appropriate Federal banking agency with respect to such institution (if other than the Corp

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 77 — Repealed. Pub. L. 89–695, title II, § 207, Oct. 16, 1966, 80 Stat. 1055

### Statutory Notes Section, act June 16, 1933, ch. 89, § 30, 48 Stat. 193, provided authority for removal of directors or officers of national banks, District banks, or State member banks for continued violations of law or for continued unsafe or unsound practices in conducting the business of such banks. #### Codification Section 401 of Pub. L. 89–695, Oct. 16, 1966, 80 Stat. 1056, which provided for reenactment of this section effective upon expiration of the period ending at the close of June 30, 1972, was repealed by Pub. L. 91–609, title IX, § 908, Dec. 31, 1970, 84 Stat. 1811. #### Conditions Governing Employment of Personnel Not Repealed, Modified, or Affected Nothing contained in section 207 of Pub. L. 89–695 repealing this section to be construed as repealing, modifying, or affecting [section 1829 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1829&num=0&edition=prelim), see section 206 of Pub. L. 89–695, set out as a note under [section 1813 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1813&num=0&edition=prelim).

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 375b — Extensions of credit to executive officers, directors, and principal shareholders of member banks

(1) **In general** — No member bank may extend credit to any of its executive officers, directors, or principal shareholders, or to any related interest of such a person, except to the extent permitted under paragraphs (2), (3), (4), (5), and (6). (2) **Preferential terms prohibited** (A) *In general* — A member bank may extend credit to its executive officers, directors, or principal shareholders, or to any related interest of such a person, only if the extension of credit— (i) is made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions by the bank with persons who are not executive officers, directors, principal shareholders, or employees of the bank; (ii) does not involve more than the normal risk of repayment or present other unfavorable features; and (iii) the bank follows credit underwriting procedures that are not less stringent than those applicable to comparable transactions by the bank with persons who are not executive officers, directors, principal shareholders, or employees of the bank. (B) *Exception* — Nothing in this paragraph shall prohibit any extension of credit made pursuant to a benefit or compensation program— (i) that is widely available to employees of the member bank; and (ii) that does not give preference to any officer, director, or principal shareholder of the member bank, or to any related interest of such person, over other employees of the member bank. (3) **Prior approval required** — A member bank may extend credit to a person described in paragraph (1) in an amount that, when aggregated with the amount of all other outstanding extensions of credit by that bank to each such person and that person’s related interests, would e

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 1468 — Transactions with affiliates; extensions of credit to executive officers, directors, and principal shareholders

**(a) Affiliate transactions** (1) **In general** — Sections 23A and 23B of the Federal Reserve Act [[12 U.S.C. 371c](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section371c&num=0&edition=prelim) and 371c–1] shall apply to every savings association in the same manner and to the same extent as if the savings association were a member bank (as defined in such Act [[12 U.S.C. 221](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section221&num=0&edition=prelim) et seq.]), except that— (A) no loan or other extension of credit may be made to any affiliate unless that affiliate is engaged only in activities described in [section 1467a(c)(2)(F)(i) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1467a/c/2/F/i&num=0&edition=prelim); and (B) no savings association may enter into any transaction described in section 23A(b)(7)(B) of the Federal Reserve Act with any affiliate other than with respect to shares of a subsidiary. (2) **Sister bank exemption made available to savings associations** (A) *Savings associations controlled by bank holding companies* — Every savings association more than 80 percent of the voting stock of which is owned by a company described in [section 1467a(c)(8) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1467a/c/8&num=0&edition=prelim) shall be treated as a bank for purposes of section 23A(d)(1) and section 23B of the Federal Reserve Act, if every savings association and bank controlled by such company complies with all applicable capital requirements on a fully phased-in basis and without reliance on goodwill. (B) *Savings associations generally* — Effective on and after January 1, 1995, every savings associa

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 1817 — Assessments

**(a) Reports of condition; access to reports** (1) Each insured State nonmember bank and each foreign bank having an insured branch which is not a Federal branch shall make to the Corporation reports of condition which shall be in such form and shall contain such information as the Board of Directors may require. Such reports shall be made to the Corporation on the dates selected as provided in paragraph (3) of this subsection and the deposit liabilities shall be reported therein in accordance with and pursuant to paragraphs (4) and (5) of this subsection. The Board of Directors may call for additional reports of condition on dates to be fixed by it and may call for such other reports as the Board may from time to time require. Any such bank which (A) maintains procedures reasonably adapted to avoid any inadvertent error and, unintentionally and as a result of such an error, fails to make or publish any report required under this paragraph, within the period of time specified by the Corporation, or submits or publishes any false or misleading report or information, or (B) inadvertently transmits or publishes any report which is minimally late, shall be subject to a penalty of not more than $2,000 for each day during which such failure continues or such false or misleading information is not corrected. Such bank shall have the burden of proving that an error was inadvertent and that a report was inadvertently transmitted or published late. Any such bank which fails to make or publish any report required under this paragraph, within the period of time specified by the Corporation, or submits or publishes any false or misleading report or information, in a manner not described in the 2nd preceding sentence shall be subject to a penalty of not more than $20,000 for each d

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 1972 — Certain tying arrangements prohibited; correspondent accounts

(1) A bank shall not in any manner extend credit, lease or sell property of any kind, or furnish any service, or fix or vary the consideration for any of the foregoing, on the condition or requirement— (A) that the customer shall obtain some additional credit, property, or service from such bank other than a loan, discount, deposit, or trust service; (B) that the customer shall obtain some additional credit, property, or service from a bank holding company of such bank, or from any other subsidiary of such bank holding company; (C) that the customer provide some additional credit, property, or service to such bank, other than those related to and usually provided in connection with a loan, discount, deposit, or trust service; (D) that the customer provide some additional credit, property, or service to a bank holding company of such bank, or to any other subsidiary of such bank holding company; or (E) that the customer shall not obtain some other credit, property, or service from a competitor of such bank, a bank holding company of such bank, or any subsidiary of such bank holding company, other than a condition or requirement that such bank shall reasonably impose in a credit transaction to assure the soundness of the credit. The Board may issue such regulations as are necessary to carry out this section, and, in consultation with the Comptroller of the Currency and the Federal Deposit Insurance Company, may by regulation or order permit such exceptions to the foregoing prohibition and the prohibitions of section 1843(f)(9) and 1843(h)(2) of this title as it considers will not be contrary to the purposes of this chapter. (2) (A) No bank which maintains a correspondent account in the name of another bank shall make an extension of credit to an execu

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 375a — Loans to executive officers of banks

Page 151 TITLE 12—BANKS AND BANKING § 375a ship, association, business trust, or individual in making loans on the security of stocks, bonds, and other investment securities to brokers or dealers in stocks, bonds, and other investment securities. Every violation of this provision by any member bank shall be punishable by a fine of not more than $100 per day during the con- tinuance of such violation; and such fine may be collected, by suit or otherwise, by the Federal reserve bank of the district in which such mem- ber bank is located. (Dec. 23, 1913, ch. 6, § 19(d), formerly § 19 (par. 7), as added June 16, 1933, ch. 89, § 11(a), 48 Stat. 181; renumbered § 19(d), Pub. L. 89–597, § 2(b), Sept. 21, 1966, 80 Stat. 824.) Editorial Notes CODIFICATION Section is comprised of subsec. (d), formerly seventh par., of section 19 of act Dec. 23, 1913, as redesignated by Pub. L. 89–597. § 375. [Reserved] (Dec. 23, 1913, ch. 6, § 22(d), as added Sept. 26, 1918, ch. 177, § 5, 40 Stat. 971; amended Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704; Pub. L. 111–203, title VI, § 615(b), July 21, 2010, 124 Stat. 1615.) Editorial Notes AMENDMENTS 2010—Pub. L. 111–203 substituted ‘‘[Reserved]’’ for text, which related to purchases from directors and sales to directors. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Pub. L. 111–203, title VI, § 615(c), July 21, 2010, 124 Stat. 1615, provided that: ‘‘The amendments made by this section [amending this section and section 1828 of this title] shall take effect on the transfer date.’’ [For definition of ‘‘transfer date’’ as used in section 615(c) of Pub. L. 111–203, set out above, see section 5301 of this title.] § 375a. Loans to executive officers of banks (1) General prohibi

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