Institutions; drafts and bills of exchange; types
Ratio limit of bills to unimpaired capital stock and surplus
Except as provided in subsection (c), no institution shall accept such bills, or be obligated for a participation share in such bills, in an amount equal at any time in the aggregate to more than 150 per centum of its paid up and unimpaired capital stock and surplus or, in the case of a United States branch or agency of a foreign bank, its dollar equivalent as determined by the Board under subsection (h).
Authorization for special ratio limit; foreign banks
The Board, under such conditions as it may prescribe, may authorize, by regulation or order, any institution to accept such bills, or be obligated for a participation share in such bills, in an amount not exceeding at any time in the aggregate 200 per centum of its paid up and unimpaired capital stock and surplus or, in the case of a United States branch or agency of a foreign bank, its dollar equivalent as determined by the Board under subsection (h).
Ratio limit for domestic transactions
Notwithstanding subsections (b) and (c), with respect to any institution, the aggregate acceptances, including obligations for a participation share in such acceptances, growing out of domestic transactions shall not exceed 50 per centum of the aggregate of all acceptances, including obligations for a participation share in such acceptances, authorized for such institution under this section.
Ratio limit for single entity; foreign banks; security
No institution shall accept bills, or be obligated for a participation share in such bills, whether in a foreign or domestic transaction, for any one person, partnership, corporation, association or other entity in an amount equal at any time in the aggregate to more than 10 per centum of its paid up and unimpaired capital stock and surplus, or, in the case of a United States branch or agency of a foreign bank, its dollar equivalent as determined by the Board under subsection (h), unless the institution is secured either by attached documents or by some other actual security growing out of the same transaction as the acceptance.
Exception for participation agreements
With respect to an institution which issues an acceptance, the limitations contained in this section shall not apply to that portion of an acceptance which is issued by such institution and which is covered by a participation agreement sold to another institution.
Definitions by Board
In order to carry out the purposes of this section, the Board may define any of the terms used in this section, and, with respect to institutions which do not have capital or capital stock, the Board shall define an equivalent measure to which the limitations contained in this section shall apply.
Dollar equivalent of foreign bank paid-up capital stock and surplus
Any limitation or restriction in this section based on paid-up and unimpaired capital stock and surplus of an institution shall be deemed to refer, with respect to a United States branch or agency of a foreign bank, to the dollar equivalent of the paid-up capital stock and surplus of the foreign bank, as determined by the Board, and if the foreign bank has more than one United States branch or agency, the business transacted by all such branches and agencies shall be aggregated in determining compliance with the limitation or restriction.
Dec. 23, 1913, ch. 6, § 1338 Stat. 264Mar. 3, 1915, ch. 9338 Stat. 958Sept. 7, 1916, ch. 46139 Stat. 752June 21, 1917, ch. 32, § 540 Stat. 235Aug. 23, 1935, ch. 61449 Stat. 704Pub. L. 97–290, title II, § 20796 Stat. 1239( (par.), ; , ; , ; , ; , title II, § 203(a), ; , , .)
Editorial Notes
References in Text
Section 3105 of this titlePub. L. 95–36992 Stat. 620, referred to in subsec. (a), was in the original a reference to section 7 of the International Banking Act of 1978, , , , which enacted sections 347d and 3105 of this title.
Codification
39 Stat. 75242 Stat. 147847 Stat. 715section 342 of this titleSection is comprised of the seventh par. of section 13 of act , as amended. The seventh par. constituted the fifth par. of section 13 in 1916 (), became the sixth par. in 1923 (), and became the seventh par. in 1932 (). For further details, see Codification notes under sections 343 and 344 of this title. For classification to this title of other pars. of section 13, see Codification note set out under .
Pub. L. 97–290The seventh par. of section 13 of the Federal Reserve Act [this section] as amended in 1982 by contained lettered subpars. (A) through (H). For purposes of codification those lettered subpars. (A) through (H) have been translated as subsecs. (a) through (h), “paragraph” has been translated as “section”, and “subparagraph” has been translated as “subsection”.
Amendments
Pub. L. 97–2901982—Subsec. (a). designated first sentence of existing provisions as subsec. (a), inserted reference to foreign banks and their subdivisions, further designated the specifications for drafts or bills as cl. (i)–(iii), and in cl. (ii) as so designated, struck out requirement that shipping documents conveying or securing title be attached at acceptance.
Pub. L. 97–290Subsec. (b). designated second independent clause of second sentence of existing provisions as subsec. (b), substituted “no institution shall accept such bills, or be obligated for a participation share in such bills, in an amount equal at any time in the aggregate to more than 150 per centum of its paid up and unimpaired capital stock and surplus” for “no bank shall accept such bills to an amount equal at any time in the aggregate to more than one-half of its paid-up and unimpaired capital stock and surplus” and inserted provisions relating to a United States branch or agency of a foreign bank.
Pub. L. 97–290Subsec. (c). designated first proviso of second sentence of existing provisions as subsec. (c), struck out provision applying the subsec. to all banks regardless of capital stock or surplus, substituted a limit of 200 per centum for 100 per centum, and inserted provisions relating to a United States branch or agency of a foreign bank.
Pub. L. 97–290Provided furtherSubsec. (d). designated second proviso of second sentence of existing provisions as subsec. (d), substituted “Notwithstanding subsections (b) and (c), with respect to any institution, the aggregate acceptances, including obligations for a participation share in such acceptances, growing out of domestic transactions shall not exceed 50 per centum of the aggregate of all acceptances, including obligations for a participation share in such acceptances, authorized for such institution under this section.” for “, That the aggregate of acceptances growing out of domestic transactions shall in no event exceed 50 per centum of such capital stock and surplus.”
Pub. L. 97–290Subsec. (e). designated first independent clause of second sentence of existing provisions as subsec. (e), substituted “institution” for “member bank” and “bank” and “accept bills, or be obligated for a participation share in such bills, whether in a foreign or domestic transaction, for any one person, partnership, corporation, association or other entity in an amount” for “accept, whether in a foreign or domestic transaction, for any one person, company, firm, or corporation to an amount”, and inserted provisions relating to a United States branch or agency of a foreign bank.
Pub. L. 97–290Subsecs. (f) to (h). added subsecs. (f) to (h).
Statutory Notes and Related Subsidiaries
Change of Name
Section 203(a) of act , changed name of Federal Reserve Board to Board of Governors of the Federal Reserve System.