12 U.S.C. § 324 — Laws applicable on becoming members

Page 112 TITLE 12—BANKS AND BANKING § 322 2004—Pub. L. 108–386 struck out ‘‘(except within the District of Columbia)’’ before period at end of last sen- tence of third par. 1952—Act July 15, 1952, inserted last sentence to third par. 1950—Act Aug. 17, 1950, inserted second par., permit- ting application for membership in the Federal Reserve System by the State bank resulting from a conversion, merger, or consolidation transaction involving a na- tional bank, except where the national bank merges or consolidates with a State bank already a member of System in which case the membership continues. 1935—Act Aug. 23, 1935, § 338, inserted phrase in third (formerly second) par. beginning ‘‘except that the ap- proval of the Board of Governors’’. 1934—Act June 16, 1934, inserted third sentence in first par. 1933—Act June 16, 1933, inserted ‘‘including Morris Plan banks and other incorporated banking institu- tions engaged in similar business’’ in first par. and in- serted proviso to third (formerly second) par. through ‘‘branches of national banks’’. 1927—Act Feb. 25, 1927, inserted second par. which be- came third par. in 1950. See Codification note above. 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. EFFECTIVE DATE OF 2004 AMENDMENT Pub. L. 108–386, § 8(i), Oct. 30, 2004, 118 Stat. 2232, pro- vided that: ‘‘The amendments made by this section [amending this section, sections 1709, 1813, 1817, 1820, 1821, 1828, 1841, 1842, 1881, 3206, and 3207 of this title, and sections 78c, 78l, and 78q of Title 15, Commerce and Trade] shall take effect on the date of the enactment of this Act [Oct. 30, 2004].’’ Pub. L. 108–386, § 9, Oct. 30, 2004, 118 Stat. 2233, pro- vided that: ‘‘Except as otherwise provided, this Act [amending this section, sections 1709, 1813, 1817, 1820, 1821, 1828, 1841, 1842, 1881, 3206, and 3207 of this title, and sections 78c, 78l, and 78q of Title 15, Commerce and Trade, and enacting provisions set out as notes under this section and section 1811 of this title] and the amendments made by this Act shall apply with respect to fiscal year 2005 and each succeeding fiscal year.’’ Executive Documents EXCEPTION AS TO TRANSFER OF FUNCTIONS Functions vested by any provision of law in Comp- troller 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. ABOLITION OF RECONSTRUCTION FINANCE CORPORATION Section 6(a) of Reorg. Plan No. 1 of 1957, eff. June 30, 1957, 22 F.R. 4633, 71 Stat. 647, set out in the Appendix to Title 5, Government Organization and Employees, abolished Reconstruction Finance Corporation. § 322. Determination on application In acting upon such applications the Board of Governors of the Federal Reserve System shall consider the financial condition of the applying bank, the general character of its management, and whether or not the corporate powers exer- cised are consistent with the purposes of this chapter. (Dec. 23, 1913, ch. 6, § 9 (par.), as added June 21, 1917, ch. 32, § 3, 40 Stat. 233; amended Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704.) 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 the fourth par. of section 9 of act Dec. 23, 1913, as amended. The fourth par. con- stituted the second par. of section 9 in 1917 (40 Stat. 232), became the third par. in 1927 (44 Stat. 1229), and be- came the fourth par. in 1950 (64 Stat. 458). For further details, see Codification note set out under section 321 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. § 323. Stock in Federal reserve banks; method of payment Whenever the Board of Governors of the Fed- eral Reserve System shall permit the applying bank to become a stockholder in the Federal re- serve bank of the district its stock subscription shall be payable on call of the Board of Gov- ernors of the Federal Reserve System, and stock issued to it shall be held subject to the provi- sions of this chapter. (Dec. 23, 1913, ch. 6, § 9 (par.), 38 Stat. 259; June 21, 1917, ch. 32, § 3, 40 Stat. 233; Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704.) 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 the fifth par. of section 9 of act Dec. 23, 1913, as amended. The fifth par. constituted the third par. of section 9 in 1917 (40 Stat. 232), became the fourth par. in 1927 (44 Stat. 1229), and became the fifth par. in 1950 (64 Stat. 458). For further details, see Codification note set out under section 321 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. § 324. Laws applicable on becoming members All banks admitted to membership under au- thority of this section shall be required to com- ply with the reserve and capital requirements of this chapter, to conform to those provisions of law imposed on national banks which prohibit such banks from lending on or purchasing their own stock and which relate to the withdrawal or impairment of their capital stock, and to con- form to the provisions of sections 56 and 60(b) of Page 113 TITLE 12—BANKS AND BANKING § 325 this title with respect to the payment of divi- dends; except that any reference in any such provision to the Comptroller of the Currency shall be deemed for the purposes of this sentence to be a reference to the Board of Governors of the Federal Reserve System. Such banks and the officers, agents, and employees thereof shall also be subject to the provisions of and to the penalties prescribed by sections 334, 656, and 1005 of title 18, and shall be required to make reports of condition and of the payment of dividends to the Federal Reserve bank of which they become a member. Not less than three of such reports shall be made annually on call of the Federal Reserve bank on dates to be fixed by the Board of Governors of the Federal Reserve System. Any bank which (A) maintains procedures rea- sonably adapted to avoid any inadvertent error and, unintentionally and as a result of such an error, fails to make or publish any report re- quired under this paragraph, within the period of time specified by the Board, or submits or publishes any false or misleading report or in- formation, 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 informa- tion is not corrected. The bank shall have the burden of proving that an error was inadvertent and that a report was inadvertently transmitted or published late. Any bank which fails to make or publish such reports within the period of time specified by the Board, or submits or publishes any false or misleading report or information, in a manner not described in the 2nd preceding sen- tence shall be subject to a penalty of not more than $20,000 for each day during which such fail- ure continues or such false or misleading infor- mation is not corrected. Notwithstanding the preceding sentence, if any bank knowingly or with reckless disregard for the accuracy of any information or report described in such sentence submits or publishes any false or misleading re- port or information, the Board may assess a pen- alty of not more than $1,000,000 or 1 percent of total assets of such bank, whichever is less, per day for each day during which such failure con- tinues or such false or misleading information is not corrected. Any penalty imposed under any of the 4 preceding sentences shall be assessed and collected by the Board in the manner provided in subparagraphs (E), (F), (G), and (I) of section 1818(i)(2) of this title (for penalties imposed under such section) and any such assessment (including the determination of the amount of the penalty) shall be subject to the provisions of such section. Any bank against which any pen- alty is assessed under this subsection shall be afforded an agency hearing if such bank submits a request for such hearing within 20 days after the issuance of the notice of assessment. Section 1818(h) of this title shall apply to any proceeding under this paragraph. Such reports of condition shall be in such form and shall contain such in- formation as the Board of Governors of the Fed- eral Reserve System may require. (Dec. 23, 1913, ch. 6, § 9 (par.), 38 Stat. 259; June 21, 1917, ch. 32, § 3, 40 Stat. 233; Aug. 23, 1935, ch. 614, title III, § 320, 49 Stat. 713; Sept. 3, 1954, ch. 1263, § 27, 68 Stat. 1236; Pub. L. 86–230, § 21(b), Sept. 8, 1959, 73 Stat. 466; Pub. L. 101–73, title IX, § 911(d), Aug. 9, 1989, 103 Stat. 480; Pub. L. 103–325, title III, § 308(c), Sept. 23, 1994, 108 Stat. 2218.) 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 the sixth par. of section 9 of act Dec. 23, 1913, as amended. The sixth par. constituted the fourth par. of section 9 in 1917 (40 Stat. 232), became the fifth par. in 1927 (44 Stat. 1229), and became the sixth par. in 1950 (64 Stat. 458). For further details, see Codification note set out under section 321 of this title. AMENDMENTS 1994—Pub. L. 103–325 struck out before period at end ‘‘and shall be published by the reporting banks in such manner and in accordance with such regulations as the said Board may prescribe’’. 1989—Pub. L. 101–73 substituted provisions for dif- ferent and increasing levels of penalties, assessment and collection of penalties, and agency hearings for provision that failure to make such reports within ten days after the date they were called for would subject the offending bank to a penalty of $100 a day for each day that it failed to transmit such report, such penalty to have been collected by the Federal Reserve bank by suit or otherwise. 1959—Pub. L. 86–230 required State member banks to comply with section 60(b) of this title and inserted pro- visions requiring a reference to the Comptroller of the Currency to be deemed a reference to the Board of Gov- ernors of the Federal Reserve System. 1954—Act Sept. 3, 1954, substituted ‘‘sections 334, 656, and 1005 of title 18’’ for ‘‘section 592 of this title’’, and ‘‘Board of Governors of the Federal Reserve System’’ for ‘‘Federal Reserve Board’’. 1935—Act Aug. 23, 1935 inserted last sentence of sec- tion. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1989 AMENDMENT Amendment by Pub. L. 101–73 applicable with respect to reports filed or required to be filed after Aug. 9, 1989, see section 911(i) of Pub. L. 101–73, set out as a note under section 161 of this title. § 325. Examinations As a condition of membership such banks shall likewise be subject to examinations made by di- rection of the Board of Governors of the Federal Reserve System or of the Federal reserve bank by examiners selected or approved by the Board of Governors of the Federal Reserve System. (Dec. 23, 1913, ch. 6, § 9 (par.), as added June 21, 1917, ch. 32, § 3, 40 Stat. 233; amended Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704.) Editorial Notes CODIFICATION Section is comprised of the seventh par. of section 9 of act Dec. 23, 1913, as amended. The seventh par. con- stituted the fifth par. of section 9 in 1917 (40 Stat. 232), became the sixth par. in 1927 (44 Stat. 1229), and became the seventh par. in 1950 (64 Stat. 458). For further de- tails, see Codification note set out under section 321 of this title.