12 U.S.C. § 242 — Ineligibility to hold office in member

Page 89 TITLE 12—BANKS AND BANKING § 242 SUBCHAPTER II—BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM § 241. Creation; membership; compensation and expenses The Board of Governors of the Federal Reserve System (hereinafter referred to as the ‘‘Board’’) shall be composed of seven members, to be ap- pointed by the President, by and with the advice and consent of the Senate, after August 23, 1935, for terms of fourteen years except as hereinafter provided, but each appointive member of the Federal Reserve Board in office on such date shall continue to serve as a member of the Board until February 1, 1936, and the Secretary of the Treasury and the Comptroller of the Cur- rency shall continue to serve as members of the Board until February 1, 1936. In selecting the members of the Board, not more than one of whom shall be selected from any one Federal Reserve district, the President shall have due regard to a fair representation of the financial, agricultural, industrial, and commercial inter- ests, and geographical divisions of the country. In selecting members of the Board, the Presi- dent shall appoint at least 1 member with dem- onstrated primary experience working in or su- pervising community banks having less than $10,000,000,000 in total assets. The members of the Board shall devote their entire time to the business of the Board and shall each receive basic compensation at the rate of $15,000 per annum, payable monthly, together with actual necessary traveling expenses. (Dec. 23, 1913, ch. 6, § 10 (par.), 38 Stat. 260; June 3, 1922, ch. 205, 42 Stat. 620; Aug. 23, 1935, ch. 614, title II, § 203(b), 49 Stat. 704; Pub. L. 114–1, title I, § 109(a), Jan. 12, 2015, 129 Stat. 9.) Editorial Notes CODIFICATION Section is comprised of first par. of section 10 of act Dec. 23, 1913. Pars. 2–7 and 8 of section 10; par. 9 of sec- tion 10, as added June 3, 1922, ch. 205, 42 Stat. 621; par. 10 of section 10, as added Aug. 23, 1935, ch. 614, § 203(d), 49 Stat. 705; and par. (12) of section 10, as added Pub. L. 111–203, title XI, § 1108(b), July 21, 2010, 124 Stat. 2126, are classified to sections 242 to 247, 1, 522, 247a, and 247b, respectively, of this title. No par. between pars. (10) and (12) has been enacted. AMENDMENTS 2015—Pub. L. 114–1 inserted after second sentence ‘‘In selecting members of the Board, the President shall ap- point at least 1 member with demonstrated primary ex- perience working in or supervising community banks having less than $10,000,000,000 in total assets.’’ 1935—Act Aug. 23, 1935, § 203(b), increased the appoint- ive membership from six to seven, terminated the membership of the Secretary of the Treasury and the Comptroller of the Currency, raised the tenure from twelve to fourteen years and increased the annual sal- ary from $12,000 to $15,000. Statutory Notes and Related Subsidiaries CHANGE OF NAME Act Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704, provided that: ‘‘Hereafter the Federal Reserve Board shall be known as the ‘Board of Governors of the Fed- eral Reserve System,’ and the governor and the vice governor of the Federal Reserve Board shall be known as the ‘chairman’ and the ‘vice chairman,’ respectively, of the Board of Governors of the Federal Reserve Sys- tem.’’ EFFECTIVE DATE OF 2015 AMENDMENT Pub. L. 114–1, title I, § 109(b), Jan. 12, 2015, 129 Stat. 9, provided that: ‘‘The amendment made by this section [amending this section] shall take effect on the date of enactment of this Act [Jan. 12, 2015] and apply to ap- pointments made on and after that effective date, ex- cluding any nomination pending in the Senate on that date.’’ REPEALS Act Oct. 15, 1949, ch. 695, § 4, 63 Stat. 880, formerly cited as a credit to this section, which was used as au- thority to substitute ‘‘$16,000’’ for ‘‘$15,000’’ in the last sentence, was repealed by Pub. L. 89–554, § 8(a), Sept. 6, 1966, 80 Stat. 655. GENERAL ACCOUNTING OFFICE STUDY OF CONFLICTS OF INTEREST Pub. L. 106–102, title VII, § 728, Nov. 12, 1999, 113 Stat. 1475, provided that the Comptroller General of the United States was to conduct a study analyzing the conflict of interest faced by the Board of Governors of the Federal Reserve System between its role as a pri- mary regulator of the banking industry and its role as a vendor of services to the banking and financial serv- ices industry and, before the end of the 1-year period beginning on Nov. 12, 1999, submit a report to the Con- gress, together with recommendations for such legisla- tive or administrative actions as the Comptroller Gen- eral determined to be appropriate. COMPENSATION OF BOARD OF GOVERNORS Annual basic compensation of Chairman and Mem- bers of Board of Governors, see sections 5313 and 5314 of Title 5, Government Organization and Employees. § 242. Ineligibility to hold office in member banks; qualifications and terms of office of members; chairman and vice chairman; oath of office The members of the Board shall be ineligible during the time they are in office and for two years thereafter to hold any office, position, or employment in any member bank, except that this restriction shall not apply to a member who has served the full term for which he was ap- pointed. Upon the expiration of the term of any appointive member of the Federal Reserve Board in office on August 23, 1935, the President shall fix the term of the successor to such member at not to exceed fourteen years, as designated by the President at the time of nomination, but in such manner as to provide for the expiration of the term of not more than one member in any two-year period, and thereafter each member shall hold office for a term of fourteen years from the expiration of the term of his prede- cessor, unless sooner removed for cause by the President. Of the persons thus appointed, 1 shall be designated by the President, by and with the advice and consent of the Senate, to serve as Chairman of the Board for a term of 4 years, and 2 shall be designated by the President, by and with the advice and consent of the Senate, to serve as Vice Chairmen of the Board, each for a term of 4 years, 1 of whom shall serve in the ab- sence of the Chairman, as provided in section 244 of this title, and 1 of whom shall be designated Vice Chairman for Supervision. The Vice Chair- man for Supervision shall develop policy rec- Page 90 TITLE 12—BANKS AND BANKING § 243 ommendations for the Board regarding super- vision and regulation of depository institution holding companies and other financial firms su- pervised by the Board, and shall oversee the su- pervision and regulation of such firms. The Chairman of the Board, subject to its super- vision, shall be its active executive officer. Each member of the Board shall within fifteen days after notice of appointment make and subscribe to the oath of office. Upon the expiration of their terms of office, members of the Board shall continue to serve until their successors are ap- pointed and have qualified. Any person ap- pointed as a member of the Board after August 23, 1935, shall not be eligible for reappointment as such member after he shall have served a full term of fourteen years. (Dec. 23, 1913, ch. 6, § 10 (par.), 38 Stat. 260; June 3, 1922, ch. 205, 42 Stat. 620; June 16, 1933, ch. 89, § 6(a), 48 Stat. 166; Aug. 23, 1935, ch. 614, title II, § 203(b), 49 Stat. 704; Pub. L. 95–188, title II, § 204(a), Nov. 16, 1977, 91 Stat. 1388; Pub. L. 111–203, title XI, § 1108(a)(1), July 21, 2010, 124 Stat. 2126.) Editorial Notes CODIFICATION Section is comprised of second par. of section 10 of act Dec. 23, 1913. For classification to this title of other pars. of section 10, see note set out under section 241 of this title. AMENDMENTS 2010—Pub. L. 111–203 substituted ‘‘Of the persons thus appointed, 1 shall be designated by the President, by and with the advice and consent of the Senate, to serve as Chairman of the Board for a term of 4 years, and 2 shall be designated by the President, by and with the advice and consent of the Senate, to serve as Vice Chairmen of the Board, each for a term of 4 years, 1 of whom shall serve in the absence of the Chairman, as provided in section 244 of this title, and 1 of whom shall be designated Vice Chairman for Supervision. The Vice Chairman for Supervision shall develop policy rec- ommendations for the Board regarding supervision and regulation of depository institution holding companies and other financial firms supervised by the Board, and shall oversee the supervision and regulation of such firms.’’ for ‘‘Of the persons thus appointed, one shall be designated by the President, by and with the advice and consent of the Senate, to serve as Chairman of the Board for a term of four years, and one shall be des- ignated by the President, by and with the consent of the Senate, to serve as Vice Chairman of the Board for a term of four years.’’ 1977—Pub. L. 95–188 substituted in third sentence ‘‘one shall be designated by the President, by and with the advice and consent of the Senate, to serve as Chair- man of the Board for a term of four years, and one shall be designated by the President, by and with the con- sent of the Senate, to serve as Vice Chairman of the Board for a term of four years’’ for ‘‘one shall be des- ignated by the President as chairman and one as vice chairman of the Board, to serve as such for a term of four years’’. 1935—Act Aug. 23, 1935, § 203(b), extended term of ap- pointive members from twelve to fourteen years, and inserted provisions for continuance in office until suc- cessor qualified and against reappointment. 1933—Act June 16, 1933, extended term of appointive members from ten to twelve years. 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 2010 AMENDMENT Pub. L. 111–203, title XI, § 1108(a)(2), July 21, 2010, 124 Stat. 2126, provided that: ‘‘The amendment made by subsection (a) [amending this section] takes effect on the date of enactment of this title [July 21, 2010] and applies to individuals who are designated by the Presi- dent on or after that date to serve as Vice Chairman of Supervision.’’ EFFECTIVE DATE OF 1977 AMENDMENT; APPLICABILITY Pub. L. 95–188, title II, § 204(b), Nov. 16, 1977, 91 Stat. 1388, provided that: ‘‘The amendment made by sub- section (a) [amending this section] takes effect on Jan- uary 1, 1979, and applies to individuals who are des- ignated by the President on or after such date to serve as Chairman or Vice Chairman of the Board of Gov- ernors of the Federal Reserve System.’’ REPEALS Act Mar. 3, 1919, ch. 101, § 2, 40 Stat. 1315, formerly cited as a credit to this section, was repealed by Pub. L. 89–554, § 8(a), Sept. 6, 1966, 80 Stat. 644. COMPENSATION OF CHAIRMAN OF BOARD Annual basic compensation of Chairman of Board of Governors, see section 5313 of Title 5, Government Or- ganization and Employees. § 243. Assessments upon Federal reserve banks to pay expenses The Board of Governors of the Federal Reserve System shall have power to levy semiannually upon the Federal reserve banks, in proportion to their capital stock and surplus, an assessment sufficient to pay its estimated expenses and the salaries of its members and employees for the half year succeeding the levying of such assess- ment, together with any deficit carried forward from the preceding half year, and such assess- ments may include amounts sufficient to pro- vide for the acquisition by the Board in its own name of such site or building in the District of Columbia as in its judgment alone shall be nec- essary for the purpose of providing suitable and adequate quarters for the performance of its functions. After September 1, 2000, the Board may also use such assessments to acquire, in its own name, a site or building (in addition to the facilities existing on such date) to provide for the performance of the functions of the Board. After approving such plans, estimates, and spec- ifications as it shall have caused to be prepared, the Board may, notwithstanding any other pro- vision of law, cause to be constructed on any site so acquired by it a building or buildings suitable and adequate in its judgment for its purposes and proceed to take all such steps as it may deem necessary or appropriate in connec- tion with the construction, equipment, and fur- nishing of such building or buildings. The Board may maintain, enlarge, or remodel any building or buildings so acquired or constructed and shall have sole control of such building or buildings and space therein. (Dec. 23, 1913, ch. 6, § 10 (par.), 38 Stat. 261; June 3, 1922, ch. 205, 42 Stat. 621; June 19, 1934, ch. 653,