Ask Reggi Your Question Now
Can you summarize 12 USC Chapter 3?
BANKS AND BANKING > FEDERAL RESERVE SYSTEM
Short Summary
The provided legal document content covers various aspects of the creation, membership, compensation, and expenses of the Board of Governors of the Federal Reserve System. It outlines the appointment process, terms of office, and qualifications of the Board members, including the Chairman and Vice Chairmen. The document also addresses the ineligibility of Board members to hold office in member banks during their term and for two years thereafter. It grants the Board the power to levy assessments on Federal reserve banks to cover its expenses. The document further governs the principal offices of the Board, the obligations and expenses of the Board, the filling of vacancies, and the powers and functions of the Board, including the examination of banks, supervision and regulation of Federal Reserve notes, and the enforcement of provisions related to depository institutions. Additionally, the document covers the pricing of services provided by the Federal Reserve System to depository institutions, the requirement for annual independent audits of Federal Reserve banks and the Board, the study on small business lending, the creation of a public database containing information on entities with access to reserve bank services, and the open data publication by the Board of Governors. No specific exemptions or penalties are mentioned in these documents. This legal document governs the establishment and functioning of the Federal Advisory Council within the Federal Reserve System. The Council is composed of members selected by each Federal reserve bank from their respective districts. The compensation and allowances for council members are determined by their board of directors, subject to the approval of the Board of Governors of the Federal Reserve System. The Council holds meetings at least four times a year in Washington, D.C., and has the authority to hold additional meetings as necessary. It has the power to select its own officers and adopt its own methods of procedure. A majority of council members constitutes a quorum for conducting business. Vacancies in the council are filled by the respective reserve banks, and the appointed members serve for the unexpired term. The Federal Advisory Council is empowered to confer directly with the Board of Governors of the Federal Reserve System on general business conditions, make representations concerning matters within the board’s jurisdiction, call for information, and make recommendations on various aspects of the reserve banking system, including discount rates, reserve conditions, open-market operations, and the general affairs of the system. Section 263 of the United States Code establishes the Federal Open Market Committee (FOMC) and outlines its membership and regulations governing open-market transactions. The FOMC consists of the members of the Board of Governors of the Federal Reserve System and five representatives of the Federal Reserve banks. The representatives are presidents or first vice presidents of Federal Reserve banks and are elected annually by the boards of directors of the respective Federal Reserve Banks. The Committee holds meetings in Washington, D.C. at least four times a year. The document also states that no Federal Reserve bank can engage or decline to engage in open-market operations without the direction and regulations adopted by the Committee. The Committee is responsible for considering, adopting, and transmitting regulations relating to the open-market transactions of the Federal Reserve banks. The purchases and sales of eligible paper for open-market operations are governed with the aim of accommodating commerce and business and considering their impact on the general credit situation of the country. The provided legal document content consists of two sections. The first section, 264 of the United States Code, governs the designation of insured banks as depositaries of public money. It grants the Secretary of the Treasury the authority to designate insured banks as depositaries for public money, including revenues, funds, and Postal Savings funds. Insured banks are also allowed to serve as financial agents of the Government and are required to perform reasonable duties as depositaries and financial agents. The Secretary of the Treasury is responsible for ensuring that the designated insured banks provide satisfactory security, either through the deposit of United States bonds or other means, for the safekeeping and prompt payment of public money. Discrimination between national banking associations, State banks members of the Federal Reserve System, or insured banks not members of the Federal Reserve System is prohibited. Any conflicting laws are repealed. The terms ‘insured bank’ and ‘insured deposit’ are defined according to section 1813 of this title. The second section, found in the United States Code under the section on the Federal Reserve System and the Federal Deposit Insurance Corporation, governs the eligibility of state-chartered banks and other institutions to serve as depositaries of public money and fiscal agents of the United States. It applies to banks, savings banks, savings and loan associations, building and loan associations, homestead associations (including cooperative banks), and credit unions created under the laws of any State, provided that their deposits or accounts are insured by a State or agency thereof or a corporation chartered pursuant to the laws of any State. The Secretary of the Treasury is authorized to deposit public money in such institutions and establish regulations for their appointment as depositaries and fiscal agents. These institutions are required to perform reasonable duties as depositaries and fiscal agents, including services related to the collection of taxes and other obligations owed to the United States. The provided legal document content covers various aspects related to the capital and stock of Federal Reserve Banks, as well as dividends and earnings. It specifies that no Federal reserve bank can commence business with a subscribed capital less than $4,000,000. National banking associations within each Federal reserve district are required to subscribe to the capital stock of the Federal reserve bank for that district in a sum equal to six per centum of the paid-up capital stock and surplus of such bank. Public subscription to capital stock is limited to $25,000 par value of stock in any Federal reserve bank, and such stock is known as public stock. Nonvoting stock is not entitled to voting power. The Board of Governors of the Federal Reserve System has the power to adopt rules and regulations governing the transfers of stock. The document also outlines the process for member banks to subscribe for additional capital stock and the surrender of excess stock. In the event of insolvency or discontinuance of banking operations, the stock held by member banks in the Federal Reserve Bank shall be canceled, and the cash-paid subscriptions on the stock shall be applied towards the debts owed by the insolvent member bank to the Federal Reserve Bank. Dividends on paid-in capital stock are provided to stockholders of a Federal reserve bank, with the amount determined based on the stockholder’s total consolidated assets. Any remaining net earnings of a reserve bank after dividend claims are met are deposited in the bank’s surplus fund, with a limit of $6,825,000,000. Surplus funds exceeding this limit are transferred to the Board of Governors of the Federal Reserve System for deposit in the general fund of the Treasury. The document also addresses the use of earnings transferred to the Treasury and the distribution of surplus funds in the event of dissolution or liquidation of a Federal reserve bank. Overall, these documents provide regulations and guidelines regarding the capital, stock, dividends, and surplus funds of Federal reserve banks. These legal documents govern various aspects of the board of directors of Federal Reserve banks and the Federal Reserve System. They outline the powers and duties of the board of directors, including the administration of the bank’s affairs, extension of discounts and accommodations to member banks, and prevention of undue use of bank credit. The documents also specify the composition of the board of directors, with three classes representing stockholding banks, the public, and the Board of Governors. The selection process for class A and class B directors is described, with member banks nominating candidates and voting determining the elected directors. Class C directors are appointed by the Board of Governors and have specific qualifications and roles, including the designation of a chairman and Federal reserve agent. The documents also mention the appointment of assistants to the Federal reserve agent. Compensation and terms of directors are outlined, along with the process for filling vacancies. The documents do not mention specific exemptions or penalties. The legal document specified in 321 of the United States Code governs the application process for banks desiring to become members of the Federal Reserve System. It applies to banks incorporated by special law of any State, operating under the Code of Law for the District of Columbia, or organized under the general laws of any State or of the United States. The document outlines the rules and regulations for banks to apply for the right to subscribe to the stock of the Federal Reserve bank within their district. It also includes provisions for the conversion, merger, or consolidation of national banks with State banks and their admission to the Federal Reserve System. The document further addresses the retention and operation of branches by State banks and the establishment of branches by State member banks, subject to the approval of the Board of Governors of the Federal Reserve System. The legal document specified in 324 of the United States Code governs the compliance requirements for banks admitted to membership in the Federal Reserve System. Banks admitted to membership must comply with reserve and capital requirements, adhere to provisions that prohibit lending on or purchasing their own stock, and follow regulations related to the withdrawal or impairment of their capital stock. They are also required to comply with provisions regarding the payment of dividends and make reports of condition and dividend payments to the Federal Reserve bank. Failure to comply with these requirements may result in penalties ranging from $2,000 to $1,000,000 or 1 percent of total assets per day. The document also outlines the procedures for penalty assessment and collection by the Board of Governors of the Federal Reserve System. The legal provision found in the United States Code under the section on State Banks as Members of the Federal Reserve System pertains to the acceptance of examinations and reports by State authorities, as well as the conduct of special examinations. The directors of the Federal reserve bank have the authority to approve examinations conducted by State authorities, and such examinations and their reports may be accepted in place of examinations conducted by examiners selected or approved by the Board of Governors of the Federal Reserve System. However, the Board may order special examinations by examiners of its own selection when necessary, and it must approve the form of the report in all cases. The expenses of examinations, other than those conducted by State authorities, may be assessed against the banks examined and paid by them. The Board of Governors of the Federal Reserve System has the discretion to furnish reports of examination or other confidential supervisory information to various entities, including Federal or State agencies with supervisory or regulatory authority over the examined entity, officers, directors, or receivers of the examined entity, and any other person deemed proper by the Board. The legal document specified in 328 of the United States Code governs the process of withdrawing membership from a Federal Reserve bank for state banks and trust companies. It states that a state bank or trust company can withdraw from membership after providing a written notice to the Board of Governors of the Federal Reserve System and surrendering and canceling all of its holdings of capital stock in the Federal reserve bank. The document allows the Board of Governors to waive the six months’ notice requirement in certain cases. However, a Federal reserve bank cannot cancel more than 25% of its capital stock in the same calendar year for voluntary withdrawals without the express authority of the Board of Governors. Once a member bank surrenders its stock holdings, it loses all rights and privileges as a member bank. The bank is entitled to a refund of its cash-paid subscription with interest and repayment of deposits and any other balance due from the Federal reserve bank, after provision has been made for any outstanding indebtedness. The document does not mention any specific penalties for non-compliance or violation of its provisions. The legal document specified in 329 of the United States Code governs the capital stock requirement as a condition precedent to membership in the Federal Reserve System. It states that 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. The document also specifies 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. The capital stock of a State member bank shall not be reduced except with the prior consent of the Board. The legal document specified in 329a of the United States Code pertains to banks becoming members of the Federal Reserve System. It states that such banks shall be subject to the provisions of this subchapter and to those of this chapter which relate specifically to member banks. However, they shall not be subject to examination under the provisions of sections 481 and 482 of this title. The document further specifies that any bank becoming a member of the Federal Reserve System shall retain its full charter and statutory rights as a State bank or trust company. It may continue to exercise all corporate powers granted by the State in which it was created and shall be entitled to all privileges of member banks. The Board of Governors of the Federal Reserve System may limit the activities of State member banks and their subsidiaries in a manner consistent with section 1831a of this title. Additionally, the document prohibits Federal reserve banks from discounting notes, drafts, or bills of exchange for any State bank or trust company if the borrower is liable for borrowed money to such State bank or trust company in an amount greater than what could be borrowed lawfully from it if it were a national banking association. The Federal reserve bank, when discounting such notes, drafts, or bills of exchange, must require a certificate or guaranty stating that the borrower is not liable to the bank in excess of the amount provided by this subchapter. These legal documents, found in the United States Code under the section on powers and duties of Federal Reserve Banks, cover various aspects of the organization and operation of Federal Reserve Banks. They outline the general powers of a Federal Reserve Bank, including the adoption of a corporate seal, making contracts, appointing officers and employees, and receiving circulating notes from the Secretary of the Treasury. The documents also govern the discounting of obligations arising from commercial transactions, the purchase and sale of bills of exchange, the making of advances to member banks, and the establishment of accounts for open-market operations. They further address the powers and limitations of Federal Reserve Banks in dealing with foreign banks and bankers, as well as the purchase and sale of acceptances and obligations of intermediate credit banks and agricultural credit corporations. These documents apply to Federal Reserve banks, member banks, nonmember banks, trust companies, and other depository institutions. No specific exemptions or penalties are mentioned in these documents. This legal document, found in the United States Code under the section on the powers and duties of member banks in the Federal Reserve System, authorizes national banking associations to make, arrange, purchase, or sell loans or extensions of credit secured by liens on interests in real estate. It also governs the rate of interest on time deposits, payment of time deposits before maturity, and waiver of notice requirements for withdrawal of savings deposits by member banks. The document further aims to limit the risks posed by an insured depository institution’s exposure to any other depository institution. It imposes restrictions on transactions between member banks and their affiliates, sets limits on the aggregate amount of covered transactions, and establishes collateral requirements. Additionally, the document governs the conditions for investment in bank premises or stock of a corporation holding such premises. It also regulates the acceptance of drafts or bills of exchange by member banks and Federal or State branch or agency of a foreign bank subject to reserve requirements. Furthermore, the document prohibits member banks from acting as agents for nonmember banks in getting discounts from reserve banks or as agents for nonbanking borrowers in making loans on securities to dealers in stocks, bonds, etc. It also governs the extension of credit by member banks to their own executive officers and establishes requirements for extensions of credit to executive officers, directors, and principal shareholders of member banks. Lastly, the document prohibits member banks from paying a greater rate of interest to certain individuals than that paid to other depositors on similar deposits and regulates the activities of dealers in securities engaging in banking business. The legal documents outline the authority and functions of Federal Reserve banks as depositaries and fiscal agents for the United States government and various federal agencies. According to 391, the Secretary of the Treasury can direct the deposit of moneys held in the general fund of the Treasury, excluding the 5 per centum fund for the redemption of outstanding national-bank notes, in Federal Reserve banks. These banks are also required to act as fiscal agents of the United States when directed by the Secretary of the Treasury. The documents further state that the revenues of the government or any part thereof may be deposited in Federal Reserve banks, and disbursements can be made by checks drawn against such deposits. 391a appropriates funds to reimburse Federal Reserve Banks for services performed as depositaries and fiscal agents for the United States. 392 specifies that no public funds of the postal savings or any government funds shall be deposited in any bank not belonging to the Federal Reserve system, except that the Secretary of the Treasury can use member banks as depositaries. 393 authorizes Federal Reserve banks to act as depositaries and fiscal agents for institutions of the Farm Credit System, while 394 authorizes them to act as depositaries, custodians, and fiscal agents for the Home Owners Loan Corporation. Finally, 395 authorizes Federal Reserve banks to act as depositaries, custodians, and fiscal agents for the Commodity Credit Corporation. These legal documents primarily apply to Federal Reserve banks and the United States government, ensuring the proper handling and management of government funds and financial transactions. The provided legal document content governs the application process for Federal Reserve notes and the collateral requirements for Federal Reserve banks. It applies specifically to Federal Reserve banks. The document states that any Federal Reserve bank can apply to the local Federal Reserve agent for the required amount of Federal Reserve notes, accompanied by collateral equal to the sum of the applied notes. The collateral can be in the form of various assets, including notes, drafts, bills of exchange, acceptances, gold certificates, Special Drawing Right certificates, direct obligations of the United States or its agencies, or any other asset of a Federal Reserve bank. The collateral security must be at least equal to the amount of Federal Reserve notes applied for. The Federal Reserve agent is required to notify the Board of Governors of the Federal Reserve System about the issuance and withdrawal of Federal Reserve notes. The Board of Governors has the authority to request additional security from a Federal Reserve bank to protect the issued notes. However, collateral is not required for Federal Reserve notes held in the vaults or on behalf of Federal Reserve banks. The provided legal document content consists of sections 441 to 448 of the United States Code under the title ‘Banks and Banking’ and the subcategory ‘Federal Reserve System’. These sections are omitted, meaning that the content is not included or available for review. Therefore, no specific information regarding the governing aspects, target audience, exemptions, or penalties can be extracted from the provided content. This legal document, found in the United States Code under the section on Banks and Banking, governs reserve requirements for depository institutions. It authorizes the Board of Governors of the Federal Reserve System to define terms, determine payment of interest, classify obligations as deposits, and prescribe regulations to prevent evasions. The document establishes definitions for depository institutions, banks, transaction accounts, nonpersonal time deposits, and reservable liabilities. It sets forth the required amounts of reserves to be maintained against transaction accounts and nonpersonal time deposits, with different ratios based on the total amount of such accounts. The Board is also granted the authority to impose reserve requirements outside the prescribed ratios in extraordinary circumstances. Additionally, the document addresses reserves related to foreign obligations or assets and provides exemptions for certain deposits. It further discusses discount and borrowing privileges for depository institutions and transitional adjustments for member banks. The document does not specify any penalties for non-compliance or violations. This legal document, part of the United States Code, governs the appointment of examiners and the examination of member banks, State banks, and trust companies. The Comptroller of the Currency appoints examiners who conduct thorough examinations of national banks and their affiliates. The examiners have the power to administer oaths, examine officers and agents under oath, and make detailed reports to the Comptroller of the Currency. The examination also includes an examination of the affairs of all affiliates other than member banks to disclose their relations and impact on the bank. Refusal to provide required information or permit examination may result in the forfeiture of the bank’s rights, privileges, and franchises. The Comptroller of the Currency has the authority to publish examination reports and impose assessments, fees, or charges on affiliated national banks for non-compliance. The document also outlines the employment, compensation, and regulation of examiners and other personnel involved in the examinations. Additionally, it allows the assignment of examiners to examine foreign operations of State banks that are members of the Federal Reserve System. This legal document governs the establishment, operation, and discontinuance of branch banks within the Federal Reserve System. It grants the Board of Governors of the Federal Reserve System the authority to permit or require Federal reserve banks to establish branch banks within their respective districts or within the district of any suspended Federal reserve bank. The branch banks are to be operated under the supervision of a board of directors, with the majority of directors appointed by the Federal reserve bank of the district and the remaining directors appointed by the Board of Governors. The directors of branch banks serve at the pleasure of the Board of Governors. The Board of Governors also has the power to require the discontinuance of any branch bank established under this section. Furthermore, the document states that no Federal Reserve bank can enter into contracts for the erection of any branch bank building without the approval of the Board of Governors.
Whom does it apply to?
Board of Governors of the Federal Reserve System, Federal Advisory Council, Federal Open Market Committee (FOMC), insured banks, state-chartered banks, other institutions serving as depositaries of public money and fiscal agents of the United States, Federal Reserve Banks, board of directors of Federal Reserve banks, banks desiring to become members of the Federal Reserve System, banks admitted to membership in the Federal Reserve System, State authorities conducting examinations, state banks, trust companies, depository institutions, federal credit unions, federal credit union members, officials and employees, individuals or entities involved in transactions with federal credit unions, and various federal agencies.
What does it govern?
Creation, membership, compensation, and expenses of the Board of Governors of the Federal Reserve System; establishment and functioning of the Federal Advisory Council within the Federal Reserve System; membership and regulations governing the Federal Open Market Committee (FOMC); designation of insured banks as depositaries of public money; eligibility of state-chartered banks and other institutions to serve as depositaries of public money and fiscal agents of the United States; capital and stock of Federal Reserve Banks, dividends, and earnings; powers and duties of the board of directors of Federal Reserve banks and the Federal Reserve System; application process for banks desiring to become members of the Federal Reserve System; compliance requirements for banks admitted to membership in the Federal Reserve System; acceptance of examinations and reports by State authorities; process of withdrawing membership from a Federal Reserve bank for state banks and trust companies; capital stock requirement as a condition precedent to membership in the Federal Reserve System; authority and functions of Federal Reserve banks as depositaries and fiscal agents for the United States government and various federal agencies; application process for Federal Reserve notes and collateral requirements for Federal Reserve banks; sections 441 to 448 of the United States Code related to Banks and Banking (omitted); reserve requirements for depository institutions; appointment of examiners and examination of member banks, State banks, and trust companies; establishment, operation, and discontinuance of branch banks within the Federal Reserve System.
What are exemptions?
No specific exemptions are mentioned in these documents.
What are the Penalties?
No specific penalties are mentioned in these documents.
Jurisdiction
U.S. Federal Government