12 U.S.C. § 615 — Powers of corporation

Page 189 TITLE 12—BANKS AND BANKING § 615 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. § 615. Powers of corporation Each corporation organized as provided in sec- tions 611 to 614 of this title shall have power, under such rules and regulations as the Board of Governors of the Federal Reserve System may prescribe: (a) Dealings in drafts, checks, bills of exchange, acceptances, and other evidences of indebt- edness; purchase and sale of securities; let- ters of credit; purchase and sale of coin, bul- lion, and exchange; borrowing and loaning money; issue of debentures, bonds, and notes; deposits; limitation of liabilities; re- serves To purchase, sell, discount, and negotiate, with or without its indorsement or guaranty, notes, drafts, checks, bills of exchange, accept- ances, including bankers’ acceptances, cable transfers, and other evidences of indebtedness; to purchase and sell, with or without its indorsement or guaranty, securities, including the obligations of the United States or of any State thereof but not including shares of stock in any corporation except as herein provided; to accept bills or drafts drawn upon it subject to such limitations and restrictions as the Board of Governors of the Federal Reserve System may impose; to issue letters of credit; to purchase and sell coin, bullion, and exchange; to borrow and to lend money; to issue debentures, bonds, and promissory notes under such general condi- tions as to security and such limitations as the Board of Governors of the Federal Reserve Sys- tem may prescribe; to receive deposits outside of the United States and to receive only such de- posits within the United States as may be inci- dental to or for the purpose of carrying out transactions in foreign countries or depend- encies or insular possessions of the United States; and generally to exercise such powers as are incidental to the power conferred by this Act or as may be usual, in the determination of the Board of Governors of the Federal Reserve System, in connection with the transaction of the business of banking or other financial oper- ations in the countries, colonies, dependencies, or possessions in which it shall transact busi- ness and not inconsistent with the powers spe- cifically granted herein. Nothing contained in this subchapter shall be construed to prohibit the Board of Governors of the Federal Reserve System, under its power to prescribe rules and regulations, from limiting the aggregate amount of liabilities of any or all classes in- curred by the corporation and outstanding at any one time. Whenever a corporation organized under this subchapter receives deposits in the United States authorized by this subchapter, it shall carry reserves in such amounts as the Board of Governors of the Federal Reserve Sys- tem may prescribe for member banks of the Fed- eral Reserve System. (b) Branches or agencies To establish and maintain for the transaction of its business branches or agencies in foreign countries, their dependencies or colonies, and in the dependencies or insular possessions of the United States, at such places as may be ap- proved by the Board of Governors of the Federal Reserve System and under such rules and regu- lations as it may prescribe, including countries or dependencies not specified in the original or- ganization certificate. (c) Purchase of stock in other corporations With the consent of the Board of Governors of the Federal Reserve System to purchase and hold stock or other certificates of ownership in any other corporation organized under the pro- visions of this subchapter, or under the laws of any foreign country or a colony or dependency thereof, or under the laws of any State, depend- ency, or insular possession of the United States but not engaged in the general business of buy- ing or selling goods, wares, merchandise, or commodities in the United States, and not transacting any business in the United States except such as in the judgment of the Board of Governors of the Federal Reserve System may be incidental to its international or foreign business: Provided, however, That, except with the approval of the Board of Governors of the Federal Reserve System, no corporation orga- nized under this subchapter shall invest in any one corporation an amount in excess of 10 per centum of its own capital and surplus, except in a corporation engaged in the business of bank- ing, when 15 per centum of its capital and sur- plus may be so invested: Provided further, That no corporation organized under this subchapter shall purchase, own, or hold stock or certificates of ownership in any other corporation organized under this subchapter or under the laws of any State which is in substantial competition there- with, or which holds stock or certificates of ownership in corporations which are in substan- tial competition with the purchasing corpora- tion. Nothing contained herein shall prevent cor- porations organized under this subchapter from purchasing and holding stock in any corporation where such purchase shall be necessary to pre- vent a loss upon a debt previously contracted in good faith; and stock so purchased or acquired in corporations organized under this subchapter shall, within six months from such purchase, be sold or disposed of at public or private sale, un- less the time to so dispose of same is extended by the Board of Governors of the Federal Re- serve System. (Dec. 23, 1913, ch. 6, § 25A (pars.), 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; Pub. L. 95–369, § 3(d), (e), Sept. 17, 1978, 92 Stat. 609; renumbered § 25A, Pub. L. 102–242, title I, § 142(e)(2), Dec. 19, 1991, 105 Stat. 2281.) Editorial Notes REFERENCES IN TEXT Each corporation organized as provided in sections 611 to 614 of this title, referred to in first par., was in the original ‘‘Each corporation so organized’’. Page 190 TITLE 12—BANKS AND BANKING § 616 This act, referred to in subsec. (a), 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 sec- tion 226 of this title and Tables. This subchapter, referred to in subsecs. (a) and (c), was in the original ‘‘this section’’, meaning section 25A of act Dec. 23, 1913, which is classified to this sub- chapter (§ 611 et seq.). Organized under this subchapter, referred to in sub- sec. (c), was in the original ‘‘organized hereunder’’, meaning under section 25A of act Dec. 23, 1913, which comprises this subchapter. CODIFICATION Section is comprised of pars. 6 and 7 (undesignated) of section 25A of act Dec. 23, 1913, which comprises this subchapter. For complete classification of section 25A of this Act, see Codification note set out under section 611 of this title. AMENDMENTS 1978—Subsec. (a). Pub. L. 95–369, § 3(d), struck out ‘‘, but in no event having liabilities outstanding there- on at any one time exceeding ten times its capital stock and surplus’’ after ‘‘under such general condi- tions as to security and such limitations as the Board of Governors of the Federal Reserve System may pre- scribe’’. Pub. L. 95–369, § 3(e), which directed substituting ‘‘for member banks of the Federal Reserve System’’ for ‘‘, but in no event less than ten per centum of its de- posits,’’ in the third sentence, was executed by making the substitution for ‘‘, but in no event less than 10 per centum of its deposits’’ to reflect the probable intent of Congress. 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. § 616. Place of carrying on business; when busi- ness may be begun No corporation organized under this sub- chapter shall carry on any part of its business in the United States except such as, in the judg- ment of the Board of Governors of the Federal Reserve System, shall be incidental to its inter- national or foreign business: And provided fur- ther, That except such as is incidental and pre- liminary to its organization, no such corpora- tion shall exercise any of the powers conferred by this subchapter until it has been duly author- ized by the Board of Governors of the Federal Reserve System to commence business as a cor- poration organized under the provisions of this subchapter. (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. 8 (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. § 617. Engaging in commerce or trade in com- modities; price fixing; forfeiture of charter; acts forbidden to directors, officers, agents, or employees No corporation organized under this sub- chapter shall engage in commerce or trade in commodities except as specifically provided in this subchapter, nor shall it, either directly or indirectly, control or fix or attempt to control or fix the price of any such commodities. The charter of any corporation violating this provi- sion shall be subject to forfeiture in the manner provided in this subchapter. It shall be unlawful for any director, officer, agent, or employee of any such corporation to use or to conspire to use the credit, the funds, or the power of the cor- poration to fix or control the price of any such commodities, and any such person violating this provision shall be liable to a fine of not less than $1,000 and not exceeding $5,000 or imprison- ment not less than one year and not exceeding five years, or both, in the discretion of the court. (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.) 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. 9 (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. § 618. Capital stock; amount; when paid in No corporation shall be organized under the provisions of this subchapter with a capital stock of less than $2,000,000, one-quarter of which must be paid in before the corporation may be authorized to begin business, and the re- mainder of the capital stock of such corporation shall be paid in installments of at least 10 per centum on the whole amount to which the cor- poration shall be limited as frequently as one in- stallment at the end of each succeeding two months from the time of the commencement of its business operations until the whole of the capital stock shall be paid in: Provided, however, That whenever $2,000,000 of the capital stock of any corporation is paid in the remainder of the corporation’s capital stock or any unpaid part of such remainder may, with the consent of the