12 U.S.C. § 302 — Number of members; classes

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. Page 109 TITLE 12—BANKS AND BANKING § 304 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. § 303. Qualifications and disabilities No Senator or Representative in Congress shall be a member of the Board of Governors of the Federal Reserve System or an officer or a di- rector of a Federal reserve bank. No director of class B shall be an officer, direc- tor, or employee of any bank. No director of class C shall be an officer, direc- tor, employee, or stockholder of any bank. (Dec. 23, 1913, ch. 6, § 4 (pars.), 38 Stat. 255; Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704.) Editorial Notes CODIFICATION Section is comprised of pars. 13 to 15 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. 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. § 304. Class A and class B directors; selection Directors of class A and class B shall be cho- sen in the following manner: The Board of Gov- ernors of the Federal Reserve System shall clas- sify the member banks of the district into three general groups or divisions designating each group by number. Each group shall consist as nearly as may be of banks of similar capitaliza- tion. Each member bank shall be permitted to nominate to the chairman of the board of direc- tors of the Federal reserve bank of the district one candidate for director of class A and one candidate for director of class B. The candidates so nominated shall be listed by the chairman, indicating by whom nominated, and a copy of said list shall, within fifteen days after its com- pletion, be furnished by the chairman to each member bank. Each member bank by a resolu- tion of the board or by an amendment to its by- laws shall authorize its president, cashier, or some other officer to cast the vote of the mem- ber bank in the elections of class A and class B directors: Provided, That whenever any member banks within the same Federal Reserve district are subsidiaries of the same bank holding com- pany within the meaning of the Bank Holding Company Act of 1956 [12 U.S.C. 1841 et seq.], par- ticipation in any such nomination or election by such member banks, including such bank hold- ing company if it is also a member bank, shall be confined to one of such banks, which may be designated for the purpose by such holding com- pany. Within fifteen days after receipt of the list of candidates the duly authorized officer of a mem- ber bank shall certify to the chairman his first, second, and other choices for director of class A and class B, respectively, upon a preferential ballot upon a form furnished by the chairman of the board of directors of the Federal reserve bank of the district. Each such officer shall make a cross opposite the name of the first, sec- ond, and other choices for a director of class A and for a director of class B, but shall not vote more than one choice for any one candidate. No officer or director of a member bank shall be eli- gible to serve as a class A director unless nomi- nated and elected by banks which are members of the same group as the member bank of which he is an officer or director. Any person who is an officer or director of more than one member bank shall not be eligi- ble for nomination as a class A director except by banks in the same group as the bank having the largest aggregate resources of any of those of which such person is an officer or director. Any candidate having a majority of all votes cast in the column of first choice shall be de- clared elected. If no candidate have a majority of all the votes in the first column, then there shall be added together the votes cast by the electors for such candidates in the second col- umn and the votes cast for the several can- didates in the first column. The candidate then having a majority of the electors voting and the highest number of combined votes shall be de- clared elected. If no candidate have a majority of electors voting and the highest number of votes when the first and second choices shall have been added, then the votes cast in the third column for other choices shall be added together in like manner, and the candidate then having the highest number of votes shall be declared elected. An immediate report of election shall be declared. (Dec. 23, 1913, ch. 6, § 4 (pars.), 38 Stat. 256; Sept. 26, 1918, ch. 177, § 1, 40 Stat. 968; June 26, 1930, ch. 614, 46 Stat. 815; June 16, 1933, ch. 89, § 3(b), 48 Stat. 163; Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704; Pub. L. 89–485, § 13(e), July 1, 1966, 80 Stat. 243.) Editorial Notes REFERENCES IN TEXT The Bank Holding Company Act of 1956, referred to in text, is act May 9, 1956, ch. 240, 70 Stat. 133, which is classified principally to chapter 17 (§ 1841 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 1841 of this title and Tables. CODIFICATION Section is comprised of pars. 16 to 21 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. AMENDMENTS 1966—Pub. L. 89–485 substituted proviso restricting participation in nomination or election of directors by member banks to one member bank whenever any member banks within the same Federal reserve district are subsidiaries of the same bank holding company, such member bank to be designated for the purpose by the holding company for former proviso restricting the selection of directors by member banks to one member bank when two or more member banks within the same Federal reserve district are affiliated with the same holding company affiliate, such member bank to be