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12 U.S.C. § 331 — Certifying checks on State banks admitted as members

submitted 113 years ago by ch. 6 to r/title-12-BANKS-AND-BANKING · 120 words · no verdicts yet

in plain englishAI-generated · not legal advice

State banks that are Federal Reserve members cannot certify a check unless the account holder has enough money on deposit to cover it. A properly certified check is still valid against the bank. But breaking this rule can cost the bank its Federal Reserve membership.

It is unlawful for any officer, clerk, or agent of a bank admitted to Federal Reserve membership under this subchapter to certify a check drawn on that bank, unless the person or company writing the check has money on deposit there, at the time of certification, equal to the check's amount. Even so, a check properly certified by an authorized officer is a good and valid obligation against the bank. But if an officer, clerk, or agent certifies a check in violation of this subchapter, the bank may be subject to losing its Federal Reserve System membership, after a hearing before the Board of Governors of the Federal Reserve System.
the actual law source: uscode.house.gov ↗public domain

It shall be unlawful for any officer, clerk, or agent of any bank admitted to membership under authority of this subchapter, to certify any check drawn upon such bank unless the person or company drawing the check has on deposit therewith at the time such check is certified an amount of money equal to the amount specified in such check. Any check so certified by duly authorized officers shall be a good and valid obligation against such bank, but the act of any such officer, clerk, or agent in violation of this subchapter, may subject such bank to a forfeiture of its membership in the Federal reserve system upon hearing by the Board of Governors of the Federal Reserve System.

Source credit: (Dec. 23, 1913, ch. 6, § 9 (par.), as added June 21, 1917, ch. 32, § 3, 40 Stat. 234; amended Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704.)

history & why it existsrecord from the source credit
  • 1913Enacted · Act of Dec. 23, 1913, ch. 6 · 40 Stat. 234
  • 1935Amended · Act of Aug. 23, 1935, ch. 614 · 49 Stat. 704

A history note hasn’t been published yet. The record shows enactment by ch. 6 on 1913-12-23.

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