12 U.S.C. § 376 — Rate of interest paid to directors, etc.

This section applies to member banks — banks that belong to the Federal Reserve System. It sets one simple rule: a member bank cannot pay a director, officer, attorney, or employee a higher interest rate on their deposits than the bank pays to other, ordinary depositors who hold similar deposits. In practice, this means if a bank offers a certain interest rate on a certain size and type of account, it must offer that same rate to a director or officer with a similar account. The bank cannot quietly give its own insiders — the people who run it or work closely with it — a better deal on deposit interest than regular customers receive. An insider's account has to be treated the same as an ordinary depositor's account of the same kind. The section does not spell out exactly what makes two deposits "similar" — it leaves that comparison to be made case by case, deposit by deposit.