12 U.S.C. § 329 — Capital stock required as condition precedent to membership
submitted 113 years ago by ch. 6 to r/title-12-BANKS-AND-BANKING · 150 words · no verdicts yet
A bank can't join the Federal Reserve without adequate capital and surplus. A deposit-taking bank without enough capital also needs federal deposit insurance approval. A state member bank can't reduce its capital stock without the Board's prior consent.
A bank applying to join the Federal Reserve System can only be admitted if the Board of Governors judges that its capital stock and surplus are adequate — adequate for the kind and condition of its assets, and for its current and expected deposit debts and other business responsibilities.
There's an extra rule for banks that take deposits (other than trust funds): if such a bank doesn't have as much capital stock and surplus as a national bank would need to be set up in that same location, it can only join the Federal Reserve if it is (or has been) approved for deposit insurance under the Federal Deposit Insurance Act.
A state* member bank can't reduce its capital stock without first getting the Board's consent.
No applying bank shall be admitted to membership unless it possesses capital stock and surplus which, in the judgment of the Board of Governors of the Federal Reserve System, are adequate in relation to the character and condition of its assets and to its existing and prospective deposit liabilities and other corporate responsibilities: Provided, That no bank engaged in the business of receiving deposits other than trust funds, which does not possess capital stock and surplus in an amount equal to that which would be required for the establishment of a national banking association in the place in which it is located, shall be admitted to membership unless it is, or has been, approved for deposit insurance under the Federal Deposit Insurance Act [12 U.S.C. 1811 et seq.]. The capital stock of a State* member bank shall not be reduced except with the prior consent of the Board.
Source credit: (Dec. 23, 1913, ch. 6, § 9 (par.), 38 Stat. 259; June 21, 1917, ch. 32, § 3, 40 Stat. 234; Mar. 4, 1923, ch. 252, title IV, § 401, 42 Stat. 1478; June 16, 1933, ch. 89, § 17(b), 48 Stat. 185; July 15, 1952, ch. 753, § 1, 66 Stat. 633.)
- 1913Enacted · Act of Dec. 23, 1913, ch. 6 · 38 Stat. 259
- 1917Amended · Act of June 21, 1917, ch. 32 · 40 Stat. 234
- 1923Amended · Act of Mar. 4, 1923, ch. 252 · 42 Stat. 1478
- 1933Amended · Act of June 16, 1933, ch. 89 · 48 Stat. 185
- 1952Amended · Act of July 15, 1952, ch. 753 · 66 Stat. 633
A history note hasn’t been published yet. The record shows enactment by ch. 6 on 1913-12-23.
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