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Can you summarize Part D?
Banking Practices > Reserves, Loans, Investments and Miscellaneous
Short Summary
These legal documents cover various aspects of banking practices, including reserves, loans, investments, and miscellaneous activities. The documents specify that banks, whether members of the Federal Reserve System or not, must maintain reserves against deposits as established by the Federal Reserve Act or the Board of Governors of the Federal Reserve System. The reserve fund consists of legal tender on hand and money due from approved reserve depositaries. It is a criminal offense for a territorial bank to have an average deficiency in its reserve for more than one additional banking day without notifying the Commissioner. The documents also govern the lending practices of commercial banks, specifying that they can lend at a lawful rate of interest on the security of the borrower’s personal obligation or personal property. Loans on the security of another banking institution’s stock or obligations must have a stipulated period and require full amortization. Banks can also lend on the security of a first mortgage on improved real estate, subject to certain conditions. The documents further outline the types of investments territorial banks are authorized to make, including purchasing or discounting various types of obligations. They can invest in the stock of a corporation engaged in trust company business and in the stock and obligations of a corporation owning the premises occupied by the bank. The documents also mention the acceptance practices of commercial banks, allowing them to accept drafts for specific purposes such as financing the purchase of goods or providing dollar exchange for trade. Additionally, the documents govern the diversification of loans and investments for territorial banks, setting limitations on the extension of credit and purchase of certain obligations. Banks are also allowed to acquire property to satisfy or protect a loan, with limitations on the type of property acquired and timeframes for selling it. The documents also cover the investment and depreciation of property, the sale of bank assets, borrowing money and issuing evidence of indebtedness, pledging assets, assuming secondary liability, and defining the term ‘capital’ for the purposes of the documents. These documents apply to territorial banks, commercial banks, and banking institutions involved in the specified practices and activities.
Whom does it apply to?
Territorial banks, commercial banks, and banking institutions
What does it govern?
Reserves, loans, investments, and miscellaneous practices of banks
What are exemptions?
No specific exemptions are mentioned in these documents.
What are the Penalties?
There are no specific penalties mentioned in these documents.
Jurisdiction
Guam