US Code

Public Law 119-73 (01/23/2026)

12 U.S.C. § 347b

Advances to individual member banks on time or demand notes; maturities; time notes secured by mortgage loans covering one-to-four family residences

(a)

In general

Any Federal Reserve bank, under rules and regulations prescribed by the Board of Governors of the Federal Reserve System, may make advances to any member bank on its time or demand notes having maturities of not more than four months and which are secured to the satisfaction of such Federal Reserve bank.

Notwithstanding the foregoing, any Federal Reserve bank, under rules and regulations prescribed by the Board of Governors of the Federal Reserve System, may make advances to any member bank on its time notes having such maturities as the Board may prescribe and which are secured by mortgage loans covering a one-to-four family residence. Such advances shall bear interest at a rate equal to the lowest discount rate in effect at such Federal Reserve bank on the date of such note.

(b)

Limitations on advances

(1)

Limitation on extended periods

Except as provided in paragraph (2), no advances to any undercapitalized depository institution by any Federal Reserve bank under this section may be outstanding for more than 60 days in any 120-day period.

(2)

Viability exception

(A)

In general

If—
(i)
the head of the appropriate Federal banking agency certifies in advance in writing to the Federal Reserve bank that any depository institution is viable; or
(ii)
the Board conducts an examination of any depository institution and the Chairman of the Board certifies in writing to the Federal Reserve bank that the institution is viable,
the limitation contained in paragraph (1) shall not apply during the 60-day period beginning on the date such certification is received.
(B)

Extensions of period

The 60-day period may be extended for additional 60-day periods upon receipt by the Federal Reserve bank of additional written certifications under subparagraph (A) with respect to each such additional period.

(C)

Authority to issue a certificate of viability may not be delegated

The authority of the head of any agency to issue a written certification of viability under this paragraph may not be delegated to any other person.

(D)

Extended advances subject to paragraph (3)

Notwithstanding paragraph (1), an undercapitalized depository institution which does not have a certificate of viability in effect under this paragraph may have advances outstanding for more than 60 days in any 120-day period if the Board elects to treat—
(i)
such institution as critically undercapitalized under paragraph (3); and
(ii)
any such advance as an advance described in subparagraph (A)(i) of paragraph (3).
(3)

Advances to critically undercapitalized depository institutions

(A)

Liability for increased loss

Notwithstanding any other provision of this section, if—
(i)
in the case of any critically undercapitalized depository institution—
(I)
any advance under this section to such institution is outstanding without payment having been demanded as of the end of the 5-day period beginning on the date the institution becomes a critically undercapitalized depository institution; or
(II)
any new advance is made to such institution under this section after the end of such period; and
(ii)
after the end of that 5-day period, the Deposit Insurance Fund of the Federal Deposit Insurance Corporation incurs a loss exceeding the loss that the Corporation would have incurred if it had liquidated that institution as of the end of that period,
the Board shall, subject to the limitations in subparagraph (B), be liable to the Federal Deposit Insurance Corporation for the excess loss, without regard to the terms of the advance or any collateral pledged to secure the advance.
(B)

Limitation on excess loss

The liability of the Board under subparagraph (A) shall not exceed the lesser of the following:
(i)
The amount of the loss the Board or any Federal Reserve bank would have incurred on the increases in the amount of advances made after the 5-day period referred to in subparagraph (A) if those increased advances had been unsecured.
(ii)
The interest received on the increases in the amount of advances made after the 5-day period referred to in subparagraph (A).
(C)

Federal Reserve to pay obligation

The Board shall pay the Federal Deposit Insurance Corporation the amount of any liability of the Board under subparagraph (A).

(D)

Report

The Board shall report to the Congress on any excess loss liability it incurs under subparagraph (A), as limited by subparagraph (B)(i), and the reasons therefore, not later than 6 months after incurring the liability.

(4)

No obligation to make advances

A Federal Reserve bank shall have no obligation to make, increase, renew, or extend any advance or discount under this chapter to any depository institution.

(5)

Definitions

(A)

Appropriate Federal banking agency

section 1813 of this titleThe term “appropriate Federal banking agency” has the same meaning as in .

(B)

Critically undercapitalized

oThe term “critically undercapitalized” has the same meaning as in section 1831 of this title.

(C)

Depository institution

section 1813 of this titleThe term “depository institution” has the same meaning as in .

(D)

Undercapitalized depository institution

The term “undercapitalized depository institution” means any depository institution which—
(i)
o is undercapitalized, as defined in section 1831 of this title; or
(ii)
has a composite CAMEL rating of 5 under the Uniform Financial Institutions Rating System (or an equivalent rating by any such agency under a comparable rating system) as of the most recent examination of such institution.
(E)

Viable

A depository institution is “viable” if the Board or the appropriate Federal banking agency determines, giving due regard to the economic conditions and circumstances in the market in which the institution operates, that the institution—
(i)
is not critically undercapitalized;
(ii)
is not expected to become critically undercapitalized; and
(iii)
is not expected to be placed in conservatorship or receivership.

Dec. 23, 1913, ch. 6, § 10BFeb. 27, 1932, ch. 58, § 247 Stat. 56Feb. 3, 1933, ch. 3447 Stat. 794Mar. 9, 1933, ch. 148 Stat. 7Aug. 23, 1935, ch. 61449 Stat. 705Pub. L. 93–449, § 588 Stat. 1368Pub. L. 96–221, title I, § 10694 Stat. 140Pub. L. 102–242, title I, § 142(a)(2)105 Stat. 2279Pub. L. 104–208, div. A, title II, § 2704(d)(9)110 Stat. 3009–489Pub. L. 109–171, title II, § 2102(b)120 Stat. 9Pub. L. 109–173, § 9(c)119 Stat. 3616(, formerly § 10(b), as added , ; amended , ; , title IV, § 402, ; , title II, § 204, ; , , ; , , ; renumbered § 10B and amended , (b), , ; , , ; , , ; , , .)

Editorial Notes

References in Text

act Dec. 23, 1913, ch. 638 Stat. 251section 226 of this titleThis chapter, referred to in subsec. (b)(4), was in the original “this Act”, meaning , , known as the Federal Reserve Act. For complete classification of this Act to the Code, see References in Text note set out under and Tables.

Amendments

Pub. L. 109–1732006—Subsec. (b)(3)(A)(ii). substituted “the Deposit Insurance Fund of” for “any deposit insurance fund in”.

Pub. L. 109–171Pub. L. 104–208, § 2704(d)(9) repealed . See 1996 Amendment note below.

Pub. L. 109–1711996—Subsec. (b)(3)(A)(ii). Pub. L. 104—208, § 2704(d)(9), which directed the amendment of cl. (ii) by substituting “the Deposit Insurance Fund of” for “any deposit insurance fund in”, was repealed by . See Effective Date of 1996 Amendment note below and 2006 Amendment note above.

Pub. L. 102–242, § 142(b)1991—, designated existing provisions as subsec. (a), inserted heading, and added subsec. (b).

Pub. L. 96–2211980— struck out second sentence of first par. relating to interest on notes under this section.

Pub. L. 93–4491974— inserted provisions relating to advances on time notes secured by mortgage loans covering one-to-four family residences.

1935—Act , struck out provision prescribing termination date of section.

1933—Act , struck out proviso which extended applicability to member banks regardless of their capital, and empowered President to extend termination date one year beyond .

Act , extended termination date from “” to “”.

Statutory Notes and Related Subsidiaries

Effective Date of 2006 Amendment

Pub. L. 109–173section 9(j) of Pub. L. 109–173section 24 of this titleAmendment by effective , see , set out as a note under .

Pub. L. 109–171section 2102(c) of Pub. L. 109–171section 1821 of this titleAmendment by effective no later than the first day of the first calendar quarter that begins after the end of the 90-day period beginning , see , set out as a Merger of BIF and SAIF note under .

Effective Date of 1996 Amendment

Pub. L. 104–208section 2704(c) of Pub. L. 104–208section 1821 of this titleAmendment by effective , if no insured depository institution is a savings association on that date, see , formerly set out as a note under .

Effective Date of 1991 Amendment

Pub. L. 102–242, title I, § 142(d)105 Stat. 2281

“The amendment made by subsection (b) [amending this section] shall take effect at the end of the 2-year period beginning on the date of enactment of this Act [].”
, , , provided that:

Effective Date of 1980 Amendment

Pub. L. 96–221section 108 of Pub. L. 96–221section 248 of this titleAmendment by effective on first day of sixth month which begins after , see , set out as a note under .

Executive Documents

Expiration

48 Stat. 1734Proclamation No. 2076, , , extended section to . See 1935 amendment note above.