12 U.S.C. § 301 — Powers and duties of board of directors;

Page 107 TITLE 12—BANKS AND BANKING § 301 by the amount of any transfer by such bank under paragraph (1). (Dec. 23, 1913, ch. 6, § 7(a), (b), 38 Stat. 258; Mar. 3, 1919, ch. 101, § 1, 40 Stat. 1314; June 16, 1933, ch. 89, § 4, 48 Stat. 163; Pub. L. 103–66, title III, § 3002(a), Aug. 10, 1993, 107 Stat. 337; Pub. L. 103–325, title VI, § 602(d), Sept. 23, 1994, 108 Stat. 2291; Pub. L. 106–113, div. B, § 1000(a)(5) [title III, § 302], Nov. 29, 1999, 113 Stat. 1536, 1501A–304; Pub. L. 114–94, div. C, title XXXII, §§ 32202, 32203(a), Dec. 4, 2015, 129 Stat. 1739; Pub. L. 115–123, div. C, title II, § 30205, Feb. 9, 2018, 132 Stat. 127; Pub. L. 115–174, title II, § 217, May 24, 2018, 132 Stat. 1326.) Editorial Notes CODIFICATION Section is comprised of subsec. (a) [formerly first un- designated par.] of section 7 of act Dec. 23, 1913, and subsec. (b) [enacted by Pub. L. 106–113, div. B, § 1000(a)(5) [title III, § 302(2)], Nov. 29, 1999, 113 Stat. 1536, 1501A–304] of section 7. Another subsec. (b) of section 7 is classified to section 290 of this title. Subsec. (c) of section 7 is classified to section 531 of this title. AMENDMENTS 2018—Subsec. (a)(3)(A). Pub. L. 115–174 substituted ‘‘$6,825,000,000’’ for ‘‘$7,500,000,000’’. Pub. L. 115–123 substituted ‘‘$7,500,000,000’’ for ‘‘$10,000,000,000’’. 2015—Subsec. (a)(1)(A). Pub. L. 114–94, § 32203(a)(1), amended subpar. (A) generally. Prior to amendment, text read as follows: ‘‘After all necessary expenses of a Federal reserve bank have been paid or provided for, the stockholders of the bank shall be entitled to re- ceive an annual dividend of 6 percent on paid-in capital stock.’’ Subsec. (a)(1)(C). Pub. L. 114–94, § 32203(a)(2), added subpar. (C). Subsec. (a)(3). Pub. L. 114–94, § 32202, added par. (3). 1999—Subsec. (a)(3). Pub. L. 106–113, § 1000(a)(5) [title III, § 302(1)], struck out heading and text of par. (3). Text read as follows: ‘‘During fiscal years 1997 and 1998, any amount in the surplus fund of any Federal reserve bank in excess of the amount equal to 3 percent of the total paid-in capital and surplus of the member banks of such bank shall be transferred to the Board for transfer to the Secretary of the Treasury for deposit in the general fund of the Treasury.’’ Subsec. (b). Pub. L. 106–113, § 1000(a)(5) [title III, § 302(2)], added subsec. (b). 1994—Par. (1)(B). Pub. L. 103–325, § 602(d)(1), inserted ‘‘(A)’’ after ‘‘subparagraph’’. Par. (2). Pub. L. 103–325, § 602(d)(2), substituted ‘‘para- graph (1)(A)’’ for ‘‘subparagraph (A)’’. 1993—Pub. L. 103–66 inserted section catchline and amended section generally. Prior to amendment, sec- tion read as follows: ‘‘After all necessary expenses of a Federal reserve bank shall have been paid or provided for, the stockholders shall be entitled to receive an an- nual dividend of 6 per centum on the paid-in capital stock, which dividend shall be cumulative. After the aforesaid dividend claims have been fully met, the net earnings shall be paid into the surplus fund of the Fed- eral reserve bank.’’ 1933—Act June 16, 1933, provided that net earnings shall be paid into surplus instead of to the United States as a franchise tax. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2015 AMENDMENT Pub. L. 114–94, div. C, title XXXII, § 32203(b), Dec. 4, 2015, 129 Stat. 1740, provided that: ‘‘The amendments made by subsection (a) [amending this section] shall take effect on January 1, 2016.’’ EFFECTIVE DATE OF 1933 AMENDMENT Act June 16, 1933, ch. 89, § 4, 48 Stat. 163, provided that the amendment made by that section is effective July 1, 1932. DISCRETIONARY SURPLUS FUNDS Pub. L. 116–283, div. F, title LXV, § 6510, Jan. 1, 2021, 134 Stat. 4633, provided that: ‘‘The dollar amount speci- fied under section 7(a)(3)(A) of the Federal Reserve Act (12 U.S.C. 289(a)(3)(A)) is reduced by $40,000,000.’’ ADDITIONAL TRANSFERS FOR FISCAL YEARS 1997 AND 1998 Pub. L. 103–66, title III, § 3002(b), Aug. 10, 1993, 107 Stat. 337, provided that in addition to the amounts re- quired to be transferred from the surplus funds of the Federal reserve banks pursuant to former section 289(a)(3) of this title, the Federal reserve banks should transfer $106,000,000 in fiscal year 1997 and $107,000,000 in fiscal year 1998 from their surplus funds to the Treas- ury for deposit in the general fund, and prohibited the banks from replenishing their surplus funds by the amount of such transfer. § 290. Use of earnings transferred to the Treas- ury The net earnings derived by the United States from Federal reserve banks shall, in the discre- tion of the Secretary, be used to supplement the gold reserve held against outstanding United States notes, or shall be applied to the reduction of the outstanding bonded indebtedness of the United States under regulations to be prescribed by the Secretary of the Treasury. Should a Fed- eral reserve bank be dissolved or go into liquida- tion, any surplus remaining, after the payment of all debts, dividend requirements as herein- before provided, and the par value of the stock, shall be paid to and become the property of the United States and shall be similarly applied. (Dec. 23, 1913, ch. 6, § 7(b), 38 Stat. 258; Pub. L. 103–66, title III, § 3002(c)(1), Aug. 10, 1993, 107 Stat. 337.) Editorial Notes CODIFICATION Section is comprised of subsec. (b) [formerly second undesignated par.] of section 7 of act Dec. 23, 1913. Sub- sec. (a) and another subsec. (b) [enacted by Pub. L. 106–113, div. B, § 1000(a)(5) [title III, § 302(2)], Nov. 29, 1999, 113 Stat. 1536, 1501A–304] of section 7 are classified to section 289 of this title. Subsec. (c) of section 7 is classified to section 531 of this title. AMENDMENTS 1993—Pub. L. 103–66 inserted section catchline. SUBCHAPTER VII—DIRECTORS OF FED- ERAL RESERVE BANKS; RESERVE AGENTS AND ASSISTANTS § 301. Powers and duties of board of directors; suspension of member bank for undue use of bank credit Every Federal reserve bank shall be conducted under the supervision and control of a board of directors. The board of directors shall perform the duties usually appertaining to the office of directors of banking associations and all such duties as are prescribed by law. Said board of directors shall administer the af- fairs of said bank fairly and impartially and Page 108 TITLE 12—BANKS AND BANKING § 302 without discrimination in favor of or against any member bank or banks and may, subject to the provisions of law and the orders of the Board of Governors of the Federal Reserve System, ex- tend to each member bank such discounts, ad- vancements, and accommodations as may be safely and reasonably made with due regard for the claims and demands of other member banks, the maintenance of sound credit conditions, and the accommodation of commerce, industry, and agriculture. The Board of Governors of the Fed- eral Reserve System may prescribe regulations further defining within the limitations of this chapter the conditions under which discounts, advancements, and the accommodations may be extended to member banks. Each Federal re- serve bank shall keep itself informed of the gen- eral character and amount of the loans and in- vestments of its member banks with a view to ascertaining whether undue use is being made of bank credit for the speculative carrying of or trading in securities, real estate, or commod- ities, or for any other purpose inconsistent with the maintenance of sound credit conditions; and, in determining whether to grant or refuse ad- vances, rediscounts, or other credit accommoda- tions, the Federal reserve bank shall give con- sideration to such information. The chairman of the Federal reserve bank shall report to the Board of Governors of the Federal Reserve Sys- tem any such undue use of bank credit by any member bank, together with his recommenda- tion. Whenever, in the judgment of the Board of Governors of the Federal Reserve System, any member bank is making such undue use of bank credit, the Board may, in its discretion, after reasonable notice and an opportunity for a hear- ing, suspend such bank from the use of the cred- it facilities of the Federal Reserve System and may terminate such suspension or may renew it from time to time. (Dec. 23, 1913, ch. 6, § 4 (pars.), 38 Stat. 255; June 16, 1933, ch. 89, § 3(a), 48 Stat. 163; 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 pars. 6 to 8 of section 4 of act Dec. 23, 1913. Pars. 1 to 3 and 25 of section 4 were omitted from the code as executed. Pars. 4 and 5, 9 to 12, 13 to 15, 16 to 21, 22, 24, and 26 of section 4, and par. 23 of section 4 as added June 21, 1917, ch. 32, § 2, 40, Stat. 232, are classified to sections 341, 302, 303, 304, 305, 307, 308, and 306, respectively, of this title. AMENDMENTS 1933—Act June 16, 1933, among other changes, added all after first sentence in third par. 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. § 302. Number of members; classes Such board of directors shall be selected as hereinafter specified and shall consist of nine members, holding office for three years, and di- vided into three classes, designated as classes A, B, and C. Class A shall consist of three members, with- out discrimination on the basis of race, creed, color, sex, or national origin, who shall be cho- sen by and be representative of the stockholding banks. Class B shall consist of three members, who shall represent the public and shall be elected without discrimination on the basis of race, creed, color, sex, or national origin, and with due but not exclusive consideration to the inter- ests of agriculture, commerce, industry, serv- ices, labor, and consumers. Class C shall consist of three members who shall be designated by the Board of Governors of the Federal Reserve System. They shall be elected to represent the public, without dis- crimination on the basis of race, creed, color, sex, or national origin, and with due but not ex- clusive consideration to the interests of agri- culture, commerce, industry, services, labor, and consumers. (Dec. 23, 1913, ch. 6, § 4 (pars.), 38 Stat. 255; Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704; Pub. L. 95–188, title II, § 202, Nov. 16, 1977, 91 Stat. 1387.) Editorial Notes CODIFICATION Section is comprised of pars. 9 to 12 of section 4 of act Dec. 23, 1913. For classification to this title of other pars. of section 4, see Codification note set out under section 301 of this title. Provisions of section which related to appointment of Class C directors when the necessary subscriptions to the capital stock have been obtained for the organiza- tion of any Federal Reserve Bank and which required the organization committee to exercise the powers and duties appertaining to the office of chairman in the or- ganization of such Federal Reserve Bank pending the designation of a chairman, were omitted as obsolete. Another section 202 of Pub. L. 95–188 enacted section 225a of this title. AMENDMENTS 1977—Second par. Pub. L. 95–188, § 202(a), required Class A members to be chosen without discrimination on the basis of race, creed, color, sex or national origin. Third par. Pub. L. 95–188, § 202(b), substituted require- ment that Class B members represent the public and be elected without discrimination on the basis of race, creed, color, sex, or national origin, and with due but not exclusive consideration to the interests of agri- culture, commerce, industry, services, labor, and con- sumers for prior requirement that such Class B mem- bers, at the time of their election, be actively engaged in their district in commerce, agriculture or some other industrial pursuit. Fourth par. Pub. L. 95–188, § 202(c), required Class C members to be elected to represent the public, without discrimination on the basis of race, creed, color, sex, or national origin, and with due but not exclusive consid- eration to the interests of agriculture, commerce, in- dustry, services, labor, and consumers.