12 U.S.C. § 265 — Insured banks as depositaries of public money; duties; security; discrimination between banks prohibited; repeal of inconsistent laws

submitted 84 years ago by ch. 404 to r/title-12-BANKS-AND-BANKING · 446 words · no verdicts yet

in plain englishAI-generated · not legal advice

Banks the Treasury Secretary approves can hold and manage public money for the government. These banks must post security, except for the part of deposits already insured. The government can't favor or discriminate against banks by type when handling public funds.

This section has no lettered subsections. It says that all "insured banks" the Secretary of the Treasury designates for the purpose must serve as depositaries of public money — including, but not limited to, U.S. revenues and funds, any funds under U.S. government control, and Postal Savings funds. The Secretary is authorized to deposit public money in those banks, under regulations the Secretary sets, and the banks may also be used as the government's financial agents, performing whatever reasonable duties come with being a depositary and financial agent. The Secretary must require these designated banks to post satisfactory security — through U.S. bonds or other means — to guarantee they safely hold and promptly repay public money, and that they faithfully carry out their duties as financial agents. As a proviso, banks don't need to post that security for the part of the public deposits that is already an "insured deposit." Each federal officer, employee, or agent who has official custody of public funds and lawfully deposits them in an insured bank is treated as a separate depositor, in that custodial role, from every other federal officer, employee, or agent who deposits public funds in the same bank — this matters for figuring out how much of each deposit is insured. The law also bars any federal department, board, agency, officer, employee, or agent from issuing regulations, entering contracts, or taking other actions about depositing, disbursing, or spending public funds — or handling funds the U.S. controls as trustee or otherwise — that discriminate for or against national banks, state banks that are Federal Reserve members, or insured banks that are not Federal Reserve members, based on which category they fall into. It also bars requiring anyone who benefits, directly or indirectly, from disbursed public funds to discriminate that way. Any earlier law or part of a law that conflicts with this section is repealed. The terms "insured bank" and "insured deposit" in this section carry the meanings given to them in section 1813 of this title.

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

All insured banks designated for that purpose by the Secretary of the Treasury shall be depositaries of public money of the United States (including, without being limited to, revenues and funds of the United States, and any funds the deposit of which is subject to the control or regulation of the United States or any of its officers, agents, or employees, and Postal Savings funds), and the Secretary is authorized to deposit public money in such depositaries, under such regulations as may be prescribed by the Secretary; and they may also be employed as financial agents of the Government; and they shall perform all such reasonable duties, as depositaries of public money and financial agents of the Government as may be required of them. The Secretary of the Treasury shall require of the insured banks thus designated satisfactory security by the deposit of United States bonds or otherwise, for the safekeeping and prompt payment of public money deposited with them and for the faithful performance of their duties as financial agents of the Government: Provided, That no such security shall be required for the safekeeping and prompt payment of such parts of the deposits of the public money in such banks as are insured deposits and each officer, employee, or agent of the United States having official custody of public funds and lawfully depositing the same in an insured bank shall, for the purpose of determining the amount of the insured deposits, be deemed a depositor in such custodial capacity separate and distinct from any other officer, employee, or agent of the United States having official custody of public funds and lawfully depositing the same in the same insured bank in custodial capacity. Notwithstanding any other provision of law, no department, board, agency, instrumentality, officer, employee, or agent of the United States shall issue or permit to continue in effect any regulations, rulings, or instructions or enter into or approve any contracts or perform any other acts having to do with the deposit, disbursement, or expenditure of public funds, or the deposit, custody, or advance of funds subject to the control of the United States as trustee or otherwise which shall discriminate against or prefer national banking associations, State banks members of the Federal Reserve System, or insured banks not members of the Federal Reserve System, by class, or which shall require those enjoying the benefits, directly or indirectly, of disbursed public funds so to discriminate. All Acts or parts thereof in conflict herewith are repealed. The terms “insured bank” and “insured deposit” as used in this section shall be construed according to the definitions of such terms in section 1813 of this title.

Source credit: (June 11, 1942, ch. 404, § 10, 56 Stat. 356; Sept. 3, 1954, ch. 1263, § 26, 68 Stat. 1235.)

history & why it existsrecord from the source credit

1942Enacted · Act of June 11, 1942, ch. 404 · 56 Stat. 356
1954Amended · Act of Sept. 3, 1954, ch. 1263 · 68 Stat. 1235

A history note hasn’t been published yet. The record shows enactment by ch. 404 on 1942-06-11.

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