31 U.S.C. § 3121 — Procedure

(a) When issuing obligations under sections 3102 through 3104 of this title, the Secretary of the Treasury may set—

(1) whether an obligation will pay interest, be sold at a discount, or use both interest and a discount;

(2) rules for the conditions under which the obligation will be offered for sale, including whether the sale will be competitive or use another method;

(3) the offering price and interest rate;

(4) how to calculate the interest rate;

(5) the dates when principal and interest will be paid;

(6) the form and denominations of the obligations; and

(7) other conditions.

(b)(1) Under conditions set by the Secretary, an obligation issued under this chapter that its owner or holder may redeem on demand may be used to pay taxes imposed by the United States Government.

(2) An obligation issued by the Government after March 3, 1971, under any law may not be redeemed before it matures to pay a Government tax in an amount greater than the obligation’s fair market value when it is redeemed. This rule does not apply to a Treasury bill issued under section 3104 of this title.

(c) Under conditions set by the Secretary, an obligation authorized by this chapter may be issued in exchange for an obligation of an agency whose principal and interest the Government unconditionally guarantees at or before maturity.

(d) Under conditions set by the Secretary, the Secretary may issue registered bonds in exchange for and instead of coupon bonds that have been or may be issued. The registered bonds must be similar in every respect to the registered bonds issued under the law authorizing the issue of the coupon bonds offered for exchange.

(e) The Secretary’s decision about an issue of obligations under sections 3102 through 3104 of this title is final.

(f) The Secretary may accept voluntary services to carry out the sale of public-debt obligations.

(g)(1) In this subsection, “registration-required obligation” means an obligation other than an obligation—

(A) that is not a type offered to the public; or

(B) that, when issued, has a maturity of no more than one year.

(2) Every registration-required obligation of the Government must be in registered form. A book-entry obligation is treated as being in registered form if the right to receive its principal and stated interest can be transferred only through a book entry that follows the Secretary’s regulations.

(3) When there is a nominee, the Secretary must issue the regulations needed to carry out this subsection.

(h)(1) The Secretary must issue regulations setting standards for safeguarding and using obligations issued under this chapter and obligations otherwise issued or guaranteed by the United States as to principal or interest. These regulations apply only to a depository institution that is not a government securities broker or government securities dealer and that holds these obligations as a fiduciary, custodian, or otherwise for a customer’s account rather than its own account. The regulations must require adequate separation of the obligations held in this way, including obligations bought or sold subject to resale or repurchase.

(2) Violating a regulation issued under paragraph (1) is an adequate basis for issuing an order under section 5239(a) or (b) of the Revised Statutes (12 U.S.C. 93(a) or (b)); section 8(b) or (c) of the Federal Deposit Insurance Act; section 5(d)(2) or 5(d)(3) of the Home Owners’ Loan Act of 1933; section 407(e) or 407(f) of the National Housing Act; or section 206(e) or 206(f) of the Federal Credit Union Act. The appropriate regulatory agency may issue such an order against a depository institution. The National Credit Union Administration Board may issue such an order against a federally insured credit union.

(3) Nothing in this subsection changes the powers that those agencies have under any other law.

(4) Before adopting regulations under this subsection, the Secretary must decide, for each appropriate regulatory agency and for the National Credit Union Administration Board, whether its rules and standards adequately serve the purposes of the regulations to be issued under this subsection. If the Secretary decides that they do, the Secretary must exempt from the new regulations each depository institution subject to those rules or standards.

(5) In this subsection—

(A) “depository institution” has the meaning stated in clauses (i) through (vi) of section 19(b)(1)(A) of the Federal Reserve Act. It also includes a foreign bank, an agency or branch of a foreign bank, and a commercial lending company owned or controlled by a foreign bank. Those terms have the meanings given in the International Banking Act of 1978.

(B) “government securities broker” has the meaning given in section 3(a)(43) of the Securities Exchange Act of 1934.

(C) “government securities dealer” has the meaning given in section 3(a)(44) of the Securities Exchange Act of 1934.

(D) “appropriate regulatory agency” has the meaning given in section 3(a)(34)(G) of the Securities Exchange Act of 1934.