12 U.S.C. § 143 — Banks in Alaska and insular possessions; lawful money reserves

submitted date unrecorded by Congress to r/title-12-BANKS-AND-BANKING · 219 words · no verdicts yet

in plain englishAI-generated · not legal advice

National banks in Alaska or U.S. territories that don't belong to the Federal Reserve must keep cash reserves equal to at least 15% of their deposits. If a bank's reserve falls below that level, it can't make new loans or pay dividends until it rebuilds it, and the Comptroller of the Currency can eventually appoint a receiver.

Every national bank located in Alaska, or in a U.S. territory or possession outside the continental United States, that is not a member of the Federal Reserve System must always keep on hand, in lawful U.S. money, an amount equal to at least 15 percent of all its deposits. If a bank's reserve drops below 15 percent of its deposits, that bank cannot increase its liabilities by making new loans, except it may still discount or buy bills of exchange payable immediately ("at sight"). It also cannot pay out any profits as dividends. These limits stay in place until the bank restores the required 15 percent proportion between its deposits and its lawful-money reserve. The Comptroller of the Currency must notify any bank whose reserve falls below the required level, so it can fix the shortfall. If the bank fails to restore its reserve within 30 days after that notice, the Comptroller — with the Secretary of the Treasury's agreement — may appoint a receiver. That receiver's job is to wind up the bank's business, following the process set out in section 192 of this title.

the actual law source: uscode.house.gov ↗public domain

Every national banking association located in Alaska or in a dependency or insular possession or any part of the United States outside of the continental United States, and not a member of the Federal reserve system, shall at all times have on hand in lawful money of the United States an amount equal to at least 15 percent of the aggregate amount of its deposits in all respects. Whenever the lawful money of any such association shall fall below 15 percent of its deposits such association shall not increase its liabilities by making any new loans or discounts other than by discounting or purchasing bills of exchange payable at sight nor make any dividends of its profits until the required proportion between the aggregate amount of its deposits and its lawful money of the United States has been restored. And the Comptroller of the Currency shall notify any such association whose lawful money reserve shall be below the amount required to be kept on hand to make good such reserve, and if such association shall fail for thirty days thereafter so to make good its lawful money the Comptroller may, with the concurrence of the Secretary of the Treasury, appoint a receiver to wind up the business of the association as provided in section 192 of this title.

Source credit: (R.S. § 5191 (part).)

history & why it existsrecord from the source credit

A history note hasn’t been published yet.

all 0 arguments · sorted by: best

no arguments yet — make the first case