12 U.S.C. § 372 — Bankers’ acceptances

Page 149 TITLE 12—BANKS AND BANKING § 372 § 372. Bankers’ acceptances (a) Institutions; drafts and bills of exchange; types Any member bank and any Federal or State branch or agency of a foreign bank subject to re- serve requirements under section 3105 of this title (hereinafter in this section referred to as ‘‘institutions’’), may accept drafts or bills of ex- change drawn upon it having not more than six months’ sight to run, exclusive of days of grace— (i) which grow out of transactions involving the importation or exportation of goods; (ii) which grow out of transactions involving the domestic shipment of goods; or (iii) which are secured at the time of accept- ance by a warehouse receipt or other such doc- ument conveying or securing title covering readily marketable staples. (b) Ratio limit of bills to unimpaired capital stock and surplus Except as provided in subsection (c), no insti- tution shall accept such bills, or be obligated for a participation share in such bills, in an amount equal at any time in the aggregate to more than 150 per centum of its paid up and unimpaired capital stock and surplus or, in the case of a United States branch or agency of a foreign bank, its dollar equivalent as determined by the Board under subsection (h). (c) Authorization for special ratio limit; foreign banks The Board, under such conditions as it may prescribe, may authorize, by regulation or order, any institution to accept such bills, or be obli- gated for a participation share in such bills, in an amount not exceeding at any time in the ag- gregate 200 per centum of its paid up and unimpaired capital stock and surplus or, in the case of a United States branch or agency of a foreign bank, its dollar equivalent as deter- mined by the Board under subsection (h). (d) Ratio limit for domestic transactions Notwithstanding subsections (b) and (c), with respect to any institution, the aggregate accept- ances, including obligations for a participation share in such acceptances, growing out of do- mestic transactions shall not exceed 50 per cen- tum of the aggregate of all acceptances, includ- ing obligations for a participation share in such acceptances, authorized for such institution under this section. (e) Ratio limit for single entity; foreign banks; se- curity No institution shall accept bills, or be obli- gated for a participation share in such bills, whether in a foreign or domestic transaction, for any one person, partnership, corporation, as- sociation or other entity in an amount equal at any time in the aggregate to more than 10 per centum of its paid up and unimpaired capital stock and surplus, or, in the case of a United States branch or agency of a foreign bank, its dollar equivalent as determined by the Board under subsection (h), unless the institution is se- cured either by attached documents or by some other actual security growing out of the same transaction as the acceptance. (f) Exception for participation agreements With respect to an institution which issues an acceptance, the limitations contained in this section shall not apply to that portion of an ac- ceptance which is issued by such institution and which is covered by a participation agreement sold to another institution. (g) Definitions by Board In order to carry out the purposes of this sec- tion, the Board may define any of the terms used in this section, and, with respect to institu- tions which do not have capital or capital stock, the Board shall define an equivalent measure to which the limitations contained in this section shall apply. (h) Dollar equivalent of foreign bank paid-up capital stock and surplus Any limitation or restriction in this section based on paid-up and unimpaired capital stock and surplus of an institution shall be deemed to refer, with respect to a United States branch or agency of a foreign bank, to the dollar equiva- lent of the paid-up capital stock and surplus of the foreign bank, as determined by the Board, and if the foreign bank has more than one United States branch or agency, the business transacted by all such branches and agencies shall be aggregated in determining compliance with the limitation or restriction. (Dec. 23, 1913, ch. 6, § 13 (par.), 38 Stat. 264; Mar. 3, 1915, ch. 93, 38 Stat. 958; Sept. 7, 1916, ch. 461, 39 Stat. 752; June 21, 1917, ch. 32, § 5, 40 Stat. 235; Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704; Pub. L. 97–290, title II, § 207, Oct. 8, 1982, 96 Stat. 1239.) Editorial Notes REFERENCES IN TEXT Section 3105 of this title, referred to in subsec. (a), was in the original a reference to section 7 of the Inter- national Banking Act of 1978, Pub. L. 95–369, Sept. 17, 1978, 92 Stat. 620, which enacted sections 347d and 3105 of this title. CODIFICATION Section is comprised of the seventh par. of section 13 of act Dec. 23, 1913, as amended. The seventh par. con- stituted the fifth par. of section 13 in 1916 (39 Stat. 752), became the sixth par. in 1923 (42 Stat. 1478), and became the seventh par. in 1932 (47 Stat. 715). For further de- tails, see Codification notes under sections 343 and 344 of this title. For classification to this title of other pars. of section 13, see Codification note set out under section 342 of this title. The seventh par. of section 13 of the Federal Reserve Act [this section] as amended in 1982 by Pub. L. 97–290 contained lettered subpars. (A) through (H). For pur- poses of codification those lettered subpars. (A) through (H) have been translated as subsecs. (a) through (h), ‘‘paragraph’’ has been translated as ‘‘sec- tion’’, and ‘‘subparagraph’’ has been translated as ‘‘sub- section’’. AMENDMENTS 1982—Subsec. (a). Pub. L. 97–290 designated first sen- tence of existing provisions as subsec. (a), inserted ref- erence to foreign banks and their subdivisions, further designated the specifications for drafts or bills as cl. (i)–(iii), and in cl. (ii) as so designated, struck out re- quirement that shipping documents conveying or secur- ing title be attached at acceptance. Page 150 TITLE 12—BANKS AND BANKING § 373 1 So in original. Probably should be followed by ‘‘in’’. Subsec. (b). Pub. L. 97–290 designated second inde- pendent clause of second sentence of existing provi- sions as subsec. (b), substituted ‘‘no institution shall accept such bills, or be obligated for a participation share in such bills, in an amount equal at any time in the aggregate to more than 150 per centum of its paid up and unimpaired capital stock and surplus’’ for ‘‘no bank shall accept such bills to an amount equal at any time in the aggregate to more than one-half of its paid- up and unimpaired capital stock and surplus’’ and in- serted provisions relating to a United States branch or agency of a foreign bank. Subsec. (c). Pub. L. 97–290 designated first proviso of second sentence of existing provisions as subsec. (c), struck out provision applying the subsec. to all banks regardless of capital stock or surplus, substituted a limit of 200 per centum for 100 per centum, and inserted provisions relating to a United States branch or agency of a foreign bank. Subsec. (d). Pub. L. 97–290 designated second proviso of second sentence of existing provisions as subsec. (d), substituted ‘‘Notwithstanding subsections (b) and (c), with respect to any institution, the aggregate accept- ances, including obligations for a participation share in such acceptances, growing out of domestic transactions shall not exceed 50 per centum of the aggregate of all acceptances, including obligations for a participation share in such acceptances, authorized for such institu- tion under this section.’’ for ‘‘Provided further, That the aggregate of acceptances growing out of domestic transactions shall in no event exceed 50 per centum of such capital stock and surplus.’’ Subsec. (e). Pub. L. 97–290 designated first inde- pendent clause of second sentence of existing provi- sions as subsec. (e), substituted ‘‘institution’’ for ‘‘member bank’’ and ‘‘bank’’ and ‘‘accept bills, or be ob- ligated for a participation share in such bills, whether in a foreign or domestic transaction, for any one per- son, partnership, corporation, association or other enti- ty in an amount’’ for ‘‘accept, whether in a foreign or domestic transaction, for any one person, company, firm, or corporation to an amount’’, and inserted provi- sions relating to a United States branch or agency of a foreign bank. Subsecs. (f) to (h). Pub. L. 97–290 added subsecs. (f) to (h). 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. § 373. Acceptance of drafts or bills drawn by banks in foreign countries or dependencies of United States for purpose of dollar ex- change Any member bank may accept drafts or bills of exchange drawn upon it having not more than three months’ sight to run, exclusive of days of grace, drawn under regulations to be prescribed by the Board of Governors of the Federal Re- serve System by banks or bankers in foreign countries or dependencies or insular possessions of the United States for the purpose of fur- nishing dollar exchange as required by the us- ages of trade in the respective countries, de- pendencies, or insular possessions. Such drafts or bills may be acquired by Federal reserve banks in such amounts and subject to such regu- lations, restrictions, and limitations as may be prescribed by the Board of Governors of the Fed- eral Reserve System: Provided, however, That no member bank shall accept such drafts or bills of exchange referred to 1 this paragraph for any one bank to an amount exceeding in the aggregate ten per centum of the paid-up and unimpaired capital and surplus of the accepting bank unless the draft or bill of exchange is accompanied by documents conveying or securing title or by some other adequate security: Provided further, That no member bank shall accept such drafts or bills in an amount exceeding at any time the aggregate of one-half of its paid-up and unimpaired capital and surplus. (Dec. 23, 1913, ch. 6, § 13 (par.), as added Sept. 7, 1916, ch. 461, 39 Stat. 754; amended Aug. 23, 1935, ch. 614, § 203(a), 49 Stat. 704.) Editorial Notes CODIFICATION Section is based on the twelfth par. of section 13 of act Dec. 23, 1913, as amended. The twelfth par. con- stituted the tenth par. of section 13 in 1916 (39 Stat. 754), became the eleventh par. in 1923 (42 Stat. 1478), and became the twelfth par. in 1932 (47 Stat. 715). For fur- ther details, see Codification notes under sections 342 to 344 of this title. Statutory Notes and Related Subsidiaries CHANGE OF NAME Section 203(a) of act Aug. 23, 1935, changed the name of the Federal Reserve Board to Board of Governors of the Federal Reserve System. § 374. Acting as agent for nonmember bank in getting discounts from reserve bank No member bank shall act as the medium or agent of a nonmember bank in applying for or receiving discounts from a Federal reserve bank under the provisions of this chapter, except by permission of the Board of Governors of the Fed- eral Reserve System. (Dec. 23, 1913, ch. 6, § 19(e), formerly § 19 (par. 8), 38 Stat. 270; June 21, 1917, ch. 32, § 10, 40 Stat. 239; Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704; renumbered § 19(e), Pub. L. 89–597, § 2(b), Sept. 21, 1966, 80 Stat. 824.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in text, was in the original ‘‘this Act’’, meaning act Dec. 23, 1913, ch. 6, 38 Stat. 251, known as the Federal Reserve Act. For complete classi- fication of this Act to the Code, see References in Text note set out under section 226 of this title and Tables. CODIFICATION Section is comprised of part of subsec. (e), formerly eighth par., of section 19 of act Dec. 23, 1913, as redesig- nated by Pub. L. 89–597. Remainder of subsec. (e) of such section 19 is classified to section 463 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. § 374a. Acting as agent for nonbanking borrower in making loans on securities to dealers in stocks, bonds, etc.; penalties No member bank shall act as the medium or agent of any nonbanking corporation, partner-