12 U.S.C. § 603 — Restrictions imposed by Board of Gov-

Page 185 TITLE 12—BANKS AND BANKING § 603 CODIFICATION Section is comprised of the first three undesignated pars. of section 25 of act Dec. 23, 1913, which comprises this subchapter. The fourth undesignated par. of section 25 is classi- fied to section 602 of this title. The fifth undesignated par. of section 25 is classified to section 603 of this title. The sixth undesignated par. of section 25 is classified to section 604 of this title. The former seventh undesignated par. was classified to former section 605 of this title. The seventh undesignated par. is classified to section 604a of this title. AMENDMENTS 1966—Pub. L. 89–485 struck out ‘‘either or both of’’ be- fore ‘‘the following powers’’ in introductory par. Par. Third. Pub. L. 89–485 added par. Third. 1919—Act Sept. 17, 1919, added par. beginning ‘‘Until January 21, 1921’’ and inserted ‘‘financial’’ in first sen- tence of last par. 1916—Act Sept. 7, 1916, among other changes, added par. Second, and provisions relating to restrictions on purchasing stock in other banks, investigations as to compliance with regulations, disposal of interest and separation of accounts, etc. which are now contained in section 602 et seq. 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. STUDY BY SECRETARY OF THE TREASURY OF DISCRIMI- NATORY PRACTICES BY FOREIGN NATIONS AGAINST UNITED STATES BANKS; REPORT AND RECOMMENDA- TIONS TO CONGRESS Pub. L. 95–369, § 9(a), formerly § 9, Sept. 17, 1978, 92 Stat. 623, renumbered Pub. L. 95–630, title III, § 311, Nov. 10, 1978, 92 Stat. 3678, provided that the Secretary of the Treasury conduct a study of discriminatory practices by foreign nations against United States banks and re- port his findings and recommendations to Congress on or before one year after Sept. 17, 1978, along with a de- scription of efforts taken by the United States to elimi- nate any foreign laws or practices that discriminate against United States banks or serve as a barrier to the financing of United States exports to any country. § 602. Reports and examinations Every national banking association operating foreign branches shall be required to furnish in- formation concerning the condition of such branches to the Comptroller of the Currency upon demand, and every member bank investing in the capital stock of banks or corporations de- scribed in section 601 of this title shall be re- quired to furnish information concerning the condition of such banks or corporations to the Board of Governors of the Federal Reserve Sys- tem upon demand, and the Board of Governors of the Federal Reserve System may order special examinations of the said branches, banks, or corporations at such time or times as it may deem best. (Dec. 23, 1913, ch. 6, § 25 (par.), 38 Stat. 273; Sept. 7, 1916, ch. 461, 39 Stat. 755; Sept. 17, 1919, ch. 60, § 3, 41 Stat. 286; Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704.) Editorial Notes CODIFICATION Section is comprised of the fourth undesignated par. of section 25 of act Dec. 23, 1913, which comprises this subchapter. For classification of other pars. of section 25 of this Act, see Codification note under section 601 of this title. AMENDMENTS 1919—Act Sept. 17, 1919, substituted ‘‘above’’ for ‘‘sub- paragraph 2 of the first paragraph of this section’’ in the original, which for purposes of codification appears in text as a reference to section 601 of this title. 1916—Act Sept. 7, 1916, substituted ‘‘operating’’ for ‘‘which shall receive authority to establish foreign branches’’ and inserted ‘‘every member bank investing in the capital stock of banks or corporations described in subsection second of section 601 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. 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. § 603. Restrictions imposed by Board of Gov- ernors of the Federal Reserve System on banks purchasing stock in corporations doing foreign business Before any national bank shall be permitted to purchase stock in any corporation described in section 601 of this title, the said corporation shall enter into an agreement or undertaking with the Board of Governors of the Federal Re- serve System to restrict its operations or con- duct its business in such manner or under such limitations and restrictions as the said board may prescribe for the place or places wherein such business is to be conducted. If at any time the Board of Governors of the Federal Reserve System shall ascertain that the regulations pre- scribed by it are not being complied with, said board is authorized and empowered to institute an investigation of the matter and to send for persons and papers, subpoena witnesses, and ad- minister oaths in order to satisfy itself as to the actual nature of the transactions referred to. Should such investigation result in establishing the failure of the corporation in question, or of the national bank or banks which may be stock- holders therein, to comply with the regulations laid down by the said Board of Governors of the Federal Reserve System, such national banks may be required to dispose of stock holdings in the said corporation upon reasonable notice. (Dec. 23, 1913, ch. 6, § 25 (par.), as added Sept. 7, 1916, ch. 461, 39 Stat. 755; amended Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704.) Editorial Notes CODIFICATION Section is comprised of the fifth undesignated par. of section 25 of act Dec. 23, 1913, which comprises this sub- Page 186 TITLE 12—BANKS AND BANKING § 604 chapter. For classification of other pars. of section 25 of this Act, see Codification note under section 601 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. § 604. Accounts of foreign branches; profit and loss Every national banking association operating foreign branches shall conduct the accounts of each foreign branch independently of the ac- counts of other foreign branches established by it and of its home office, and shall at the end of each fiscal period transfer to its general ledger the profit or loss accrued at each branch as a separate item. (Dec. 23, 1913, ch. 6, § 25 (par.), 38 Stat. 273; Sept. 7, 1916, ch. 461, 39 Stat. 756.) Editorial Notes CODIFICATION Section is comprised of the sixth undesignated par. of section 25 of act Dec. 23, 1913, which comprises this sub- chapter. For classification of other pars. of section 25 of this Act, see Codification note under section 601 of this title. The words ‘‘national banking association operating foreign branches’’ were in the original ‘‘such banking association’’. AMENDMENTS 1916—Act Sept. 7, 1916, substituted ‘‘accrued’’ for ‘‘ac- cruing’’. § 604a. Regulations authorizing exercise by for- eign branches of usual powers of local banks; restrictions Regulations issued by the Board of Governors of the Federal Reserve System under this sub- chapter, in addition to regulating powers which a foreign branch may exercise under other provi- sions of law, may authorize such a foreign branch, subject to such conditions and require- ments as such regulations may prescribe, to ex- ercise such further powers as may be usual in connection with the transaction of the business of banking in the places where such foreign branch shall transact business. Such regulations shall not authorize a foreign branch to engage in the general business of producing, distributing, buying or selling goods, wares, or merchandise; nor, except to such limited extent as the Board may deem to be necessary with respect to secu- rities issued by any ‘‘foreign state’’ as defined in section 632 of this title, shall such regulations authorize a foreign branch to engage or partici- pate, directly or indirectly, in the business of underwriting, selling, or distributing securities. (Dec. 23, 1913, ch. 6, § 25 (par.), as added Pub. L. 87–588, Aug. 15, 1962, 76 Stat. 388.) Editorial Notes REFERENCES IN TEXT This subchapter, referred to in text, was in the origi- nal ‘‘this section’’, meaning section 25 of act Dec. 23, 1913, which is classified to this subchapter (§ 601 et seq.). CODIFICATION Section is comprised of the seventh undesignated par. of section 25 of act Dec. 23, 1913, which comprises this subchapter. For classification of other pars. of section 25 of this Act, see Codification note under section 601 of this title. § 605. Repealed. Aug. 23, 1935, ch. 614, title III, § 329, 49 Stat. 717 Section, act Dec. 23, 1913, ch. 6, § 25 (par.), 38 Stat. 273, as amended by act Sept. 7, 1916, ch. 461, 39 Stat. 755, re- lated to interlocking directors, officers, and employees. See section 19 of Title 15, Commerce and Trade. Section was comprised of the former seventh undesig- nated par. of section 25 of act Dec. 23, 1913, which com- prises this subchapter. For classification of other pars. of section 25 of this Act, see Codification note under section 601 of this title. SUBCHAPTER II—ORGANIZATION OF CORPORATIONS TO DO FOREIGN BANKING § 611. Formation authorized; fiscal agents; de- positaries in insular possessions Corporations to be organized for the purpose of engaging in international or foreign banking or other international or foreign financial oper- ations, or in banking or other financial oper- ations in a dependency or insular possession of the United States, either directly or through the agency, ownership or control of local institu- tions in foreign countries, or in such depend- encies or insular possessions as provided by this subchapter and to act when required by the Sec- retary of the Treasury as fiscal agents of the United States, may be formed by any number of natural persons, not less in any case than five: Provided, That nothing in this subchapter shall be construed to deny the right of the Secretary of the Treasury to use any corporation orga- nized under this subchapter as depositaries in Panama and the Panama Canal Zone, or other insular possessions and dependencies of the United States. (Dec. 23, 1913, ch. 6, § 25A (par.), formerly § 25(a), as added Dec. 24, 1919, ch. 18, 41 Stat. 378; amend- ed Feb. 27, 1921, ch. 73, 41 Stat. 1145; Proc. No. 2695, eff. July 4, 1946, 11 F.R. 2517, 60 Stat. 1352; 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.). For definition of Canal Zone, referred to in text, see section 3602(b) of Title 22, Foreign Relations and Inter- course. CODIFICATION Section is comprised of par. 1 (undesignated) of sec- tion 25A of act Dec. 23, 1913, which comprises this sub- chapter. Par. 2 (undesignated) is classified to section 611a of this title. Pars. 3 to 5 (undesignated), formerly pars. 2 to 4 (un- designated), respectively, are classified to sections 612 to 614, respectively, of this title. Pars. 6 and 7 (undesignated), formerly pars. 5 and 6 (undesignated), respectively, are classified to section 615 of this title.