12 U.S.C. § 619 — Capital stock; by whom held; ownership of

Page 191 TITLE 12—BANKS AND BANKING § 619 Board of Governors of the Federal Reserve Sys- tem and subject to such regulations and condi- tions as it may prescribe, be paid in upon call from the board of directors; such unpaid sub- scriptions, however, to be included in the max- imum of 10 per centum of the national bank’s capital and surplus which a national bank is permitted under the provisions of this Act to hold in stock of corporations engaged in busi- ness of the kind described in this subchapter and subchapter I of this chapter. The capital stock of any such corporation may be increased at any time, with the approval of the Board of Gov- ernors of the Federal Reserve System, by a vote of two-thirds of its shareholders or by unani- mous consent in writing of the shareholders without a meeting and without a formal vote, but any such increase of capital shall be fully paid in within ninety days after such approval; and may be reduced in like manner, provided that in no event shall it be less than $2,000,000. No corporation, except as herein provided, shall during the time it shall continue its operations, withdraw or permit to be withdrawn, either in the form of dividends or otherwise, any portion of its capital. Any national bank may invest in the stock of any corporation organized under this subchapter. The aggregate amount of stock held by any national bank in all corporations engaged in business of the kind described in this subchapter or subchapter I of this chapter shall not exceed an amount equal to 10 percent of the capital and surplus of such bank unless the Board determines that the investment of an ad- ditional amount by the bank would not be un- safe or unsound and, in any case, shall not ex- ceed an amount equal to 20 percent of the cap- ital and surplus of such bank. (Dec. 23, 1913, ch. 6, § 25A (par.), formerly § 25(a), as added Dec. 24, 1919, ch. 18, 41 Stat. 378; amend- ed June 14, 1921, ch. 22, 42 Stat. 28; Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704; Pub. L. 95–369, § 3(d), Sept. 17, 1978, 92 Stat. 609; renum- bered § 25A, Pub. L. 102–242, title I, § 142(e)(2), Dec. 19, 1991, 105 Stat. 2281; Pub. L. 104–208, div. A, title II, § 2307, Sept. 30, 1996, 110 Stat. 3009–426.) Editorial Notes REFERENCES IN TEXT This subchapter, referred to in text, was in the origi- nal ‘‘this section’’, meaning section 25A of act Dec. 23, 1913, which is classified to this subchapter (§ 611 et seq.). This Act, referred to in text, is act Dec. 23, 1913, ch. 6, 38 Stat. 251, known as the Federal Reserve Act, which is classified principally to chapter 3 (§ 221 et seq.) of this title. 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 I of this chapter, referred to in text, was in the original ‘‘section 25 of the Federal Reserve Act as amended’’ and ‘‘section 25’’, which is classified to subchapter I (§ 601 et seq.) of this chapter. CODIFICATION Section is comprised of par. 10 (undesignated) of sec- tion 25A of act Dec. 23, 1913, which comprises this sub- chapter. For complete classification of section 25A of this Act, see Codification note set out under section 611 of this title. AMENDMENTS 1996—Pub. L. 104–208 inserted last sentence and struck out former last sentence which read as follows: ‘‘Any national banking association may invest in the stock of any corporation organized under the provisions of said sections, but the aggregate amount of stock held in all corporations engaged in business of the kind de- scribed in this subchapter and subchapter I of this chapter shall not exceed 10 per centum of the sub- scribing bank’s capital and surplus.’’ 1978—Pub. L. 95–369 struck out proviso limiting liabil- ities outstanding at any one time upon debentures, bonds and promissory notes to not in excess of ten times its paid in capital and surplus, after ‘‘stock of corporations engaged in business of the kind described in this subchapter and subchapter I of this chapter’’. 1921—Act June 14, 1921, amended section generally, inserting two provisos. 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. § 619. Capital stock; by whom held; ownership of capital stock by foreign bank Except as otherwise provided in this sub- chapter, a majority of the shares of the capital stock of any such corporation shall at all times be held and owned by citizens of the United States, by corporations the controlling interest in which is owned by citizens of the United States, chartered under the laws of the United States or of a State of the United States, or by firms or companies, the controlling interest in which is owned by citizens of the United States. Notwithstanding any other provisions of this subchapter, one or more foreign banks, institu- tions organized under the laws of foreign coun- tries which own or control foreign banks, or banks organized under the laws of the United States, the States of the United States, or the District of Columbia, the controlling interests in which are owned by any such foreign banks or institutions, may, with the prior approval of the Board of Governors of the Federal Reserve Sys- tem and upon such terms and conditions and subject to such rules and regulations as the Board of Governors of the Federal Reserve Sys- tem may prescribe, own and hold 50 per centum or more of the shares of the capital stock of any corporation organized under this subchapter and any such corporation shall be subject to the same provisions of law as any other corporation organized under this subchapter, and the terms ‘‘controls’’ and ‘‘controlling interest’’ shall be construed consistently with the definition of ‘‘control’’ in section 2 of the Bank Holding Com- pany Act of 1956 [12 U.S.C. 1841]. For the pur- poses of the preceding sentence of this para- graph the term ‘‘foreign bank’’ shall have the meaning assigned to it in the International Banking Act of 1978 [12 U.S.C. 3101 et seq.]. Any company, other than a bank as defined in sec- tion 2 of the Bank Holding Company Act of 1956, that after March 5, 1987, directly or indirectly acquires control of a corporation organized or operating under the provisions of this sub- chapter or subchapter I of this chapter shall be subject to the provisions of the Bank Holding Company Act of 1956 [12 U.S.C. 1841 et seq.] in Page 192 TITLE 12—BANKS AND BANKING § 620 the same manner and to the same extent that bank holding companies are subject thereto, ex- cept that such company shall not by reason of this paragraph be deemed a bank holding com- pany for the purpose of section 3 of the Bank Holding Company Act of 1956 [12 U.S.C. 1842]. (Dec. 23, 1913, ch. 6, § 25A (par.), formerly § 25(a), as added Dec. 24, 1919, ch. 18, 41 Stat. 378; amend- ed Aug. 23, 1935, ch. 614, title III, § 329, 49 Stat. 717; Pub. L. 95–369, § 3(f), Sept. 17, 1978, 92 Stat. 609; Pub. L. 100–86, title I, § 102(c)(1), Aug. 10, 1987, 101 Stat. 566; renumbered § 25A, Pub. L. 102–242, title I, § 142(e)(2), Dec. 19, 1991, 105 Stat. 2281.) Editorial Notes REFERENCES IN TEXT This subchapter, referred to in text, was in the origi- nal ‘‘this section’’, meaning section 25A of act Dec. 23, 1913, which is classified to this subchapter (§ 611 et seq.). The International Banking Act of 1978, referred to in text, is Pub. L. 95–369, Sept. 17, 1978, 92 Stat. 607, which enacted chapter 32 (§ 3101 et seq.) and sections 347d and 611a of this title, amended this section and sections 72, 378, 614, 615, 618, 1813, 1815, 1817, 1818, 1820, 1821, 1822, 1823, 1828, 1829b, 1831b, and 1841 of this title, and enacted provisions set out as notes under sections 247, 611a, and 3101 of this title and formerly set out as notes under sections 36, 247, and 601 of this title. For complete clas- sification of this Act to the Code, see Short Title note set out under section 3101 of this title and Tables. Subchapter I of this chapter, referred to in text, was in the original ‘‘section 25’’, meaning section 25 of the Federal Reserve Act, which is classified to subchapter I (§ 601 et seq.) of this chapter. The Bank Holding Company Act of 1956, referred to in text, is act May 9, 1956, ch. 240, 70 Stat. 133, which is classified principally to chapter 17 (§ 1841 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 1841 of this title and Tables. CODIFICATION Section is comprised of par. 11 (undesignated) of sec- tion 25A of act Dec. 23, 1913, which comprises this sub- chapter. For complete classification of section 25A of this Act, see Codification note set out under section 611 of this title. AMENDMENTS 1987—Pub. L. 100–86 inserted provisions which related to any company, other than bank as defined in section 2 of Bank Holding Company Act of 1956, that after Mar. 5, 1987, directly or indirectly acquires control of cor- poration organized or operating under provisions of this subchapter or subchapter I of this chapter to be subject to provisions of Bank Holding Company Act of 1956 in same manner and to same extent that bank holding companies are subject thereto, except that such company shall not by reason of this paragraph be deemed bank holding company for purpose of section 3 of such Act. 1978—Pub. L. 95–369 inserted ‘‘Except as otherwise provided in this subchapter’’ before ‘‘a majority of the shares’’, and inserted provision relating to the owner- ship of 50 per centum of the shares of capital stock by a foreign bank with prior approval of the Board of Gov- ernors of the Federal Reserve System. 1935—Act Aug. 23, 1935, struck out provisions relating to application of section 19 of title 15, to directors, offi- cers or employees of corporations organized under sec- tions 611–631 of this title, and excepting certain persons who received approval of Federal Reserve Board, from application of this section. Statutory Notes and Related Subsidiaries EXCEPTION FOR MIDLAND BANK, LONDON, ENGLAND Pub. L. 100–86, title I, § 102(c)(2), Aug. 10, 1987, 101 Stat. 566, provided that: ‘‘The amendment made by paragraph (1) [amending this section] does not apply to an acquisition pursuant to the application by Midland Bank, plc, London, England, pending before the Board of Governors of the Federal Reserve System on July 1, 1987, to acquire a corporation organized or operating under section 25(a) [now 25A] of the Federal Reserve Act [12 U.S.C. 611 et seq.]. If Midland Bank, plc, Lon- don, England, is not otherwise subject to section 4 of the Bank Holding Company Act of 1956 [12 U.S.C. 1843], the financial activities of Midland Bank, plc, London, England, in the United States shall, upon the deter- mination of the Board of Governors of the Federal Re- serve System made at any time, be subject to section 4 of the Bank Holding Company Act of 1956.’’ § 620. Members of Board of Governors of the Fed- eral Reserve System without interest in cor- poration No member of the Board of Governors of the Federal Reserve System shall be an officer or di- rector of any corporation organized under the provisions of this subchapter or of any corpora- tion engaged in similar business organized under the laws of any State, nor hold stock in any such corporation, and before entering upon his duties as a member of the Board of Governors of the Federal Reserve System he shall certify under oath to the Secretary of the Treasury that he has complied with this requirement. (Dec. 23, 1913, ch. 6, § 25A (par.), formerly § 25(a), as added Dec. 24, 1919, ch. 18, 41 Stat. 378; amend- ed Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704; renumbered § 25A, Pub. L. 102–242, title I, § 142(e)(2), Dec. 19, 1991, 105 Stat. 2281.) Editorial Notes REFERENCES IN TEXT This subchapter, referred to in text, was in the origi- nal ‘‘this section’’, meaning section 25A of act Dec. 23, 1913, which is classified to this subchapter (§ 611 et seq.). CODIFICATION Section is comprised of par. 12 (undesignated) of sec- tion 25A of act Dec. 23, 1913, which comprises this sub- chapter. For complete classification of section 25A of this Act, see Codification note set out under section 611 of this title. 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. § 621. Liability of shareholders on unpaid sub- scriptions; membership of corporation in Federal reserve bank prohibited Shareholders in any corporation organized under the provisions of this subchapter shall be liable for the amount of their unpaid stock sub- scriptions. No such corporation shall become a member of any Federal reserve bank. (Dec. 23, 1913, ch. 6, § 25A (par.), formerly § 25(a), as added Dec. 24, 1919, ch. 18, 41 Stat. 378; renum- bered § 25A, Pub. L. 102–242, title I, § 142(e)(2), Dec. 19, 1991, 105 Stat. 2281.)