§ 24. — Corporate powers of associations.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC24]
TITLE 12--BANKS AND BANKING
CHAPTER 2--NATIONAL BANKS
SUBCHAPTER I--ORGANIZATION AND GENERAL PROVISIONS
Sec. 24. Corporate powers of associations
Upon duly making and filing articles of association and an
organization certificate a national banking association shall become, as
from the date of the execution of its organization certificate, a body
corporate, and as such, and in the name designated in the organization
certificate, it shall have power--
First. To adopt and use a corporate seal.
Second. To have succession from February 25, 1927, or from the date
of its organization if organized after February 25, 1927, until such
time as it be dissolved by the act of its shareholders owning two-thirds
of its stock, or until its franchise becomes forfeited by reason of
violation of law, or until terminated by either a general or a special
Act of Congress or until its affairs be placed in the hands of a
receiver and finally wound up by him.
Third. To make contracts.
Fourth. To sue and be sued, complain and defend, in any court of law
and equity, as fully as natural persons.
Fifth. To elect or appoint directors, and by its board of directors
to appoint a president, vice president, cashier, and other officers,
define their duties, require bonds of them and fix the penalty thereof,
dismiss such officers or any of them at pleasure, and appoint others to
fill their places.
Sixth. To prescribe, by its board of directors, bylaws not
inconsistent with law, regulating the manner in which its stock shall be
transferred, its directors elected or appointed, its officers appointed,
its property transferred, its general business conducted, and the
privileges granted to it by law exercised and enjoyed.
Seventh. To exercise by its board of directors or duly authorized
officers or agents, subject to law, all such incidental powers as shall
be necessary to carry on the business of banking; by discounting and
negotiating promissory notes, drafts, bills of exchange, and other
evidences of debt; by receiving deposits; by buying and selling
exchange, coin, and bullion; by loaning money on personal security; and
by obtaining, issuing, and circulating notes according to the provisions
of title 62 of the Revised Statutes. The business of dealing in
securities and stock by the association shall be limited to purchasing
and selling such securities and stock without recourse, solely upon the
order, and for the account of, customers, and in no case for its own
account, and the association shall not underwrite any issue of
securities or stock; Provided, That the association may purchase for its
own account investment securities under such limitations and
restrictions as the Comptroller of the Currency may by regulation
prescribe. In no event shall the total amount of the investment
securities of any one obligor or maker, held by the association for its
own account, exceed at any time 10 per centum of its capital stock
actually paid in and unimpaired and 10 per centum of its unimpaired
surplus fund, except that this limitation shall not require any
association to dispose of any securities lawfully held by it on August
23, 1935. As used in this section the term ``investment securities''
shall mean marketable obligations, evidencing indebtedness of any
person, copartnership, association, or corporation in the form of bonds,
notes and/or debentures commonly known as investment securities under
such further definition of the term ``investment securities'' as may by
regulation be prescribed by the Comptroller of the Currency. Except as
hereinafter provided or otherwise permitted by law, nothing herein
contained shall authorize the purchase by the association for its own
account of any shares of stock of any corporation. The limitations and
restrictions herein contained as to dealing in, underwriting and
purchasing for its own account, investment securities shall not apply to
obligations of the United States, or general obligations of any State or
of any political subdivision thereof, or obligations of the Washington
Metropolitan Area Transit Authority which are guaranteed by the
Secretary of Transportation under section 9 of the National Capital
Transportation Act of 1969, or obligations issued under authority of the
Federal Farm Loan Act, as amended, or issued by the thirteen banks for
cooperatives or any of them or the Federal Home Loan Banks, or
obligations which are insured by the Secretary of Housing and Urban
Development under title XI of the National Housing Act [12 U.S.C.
1749aaa et seq.] or obligations which are insured by the Secretary of
Housing and Urban Development (hereinafter in this sentence referred to
as the ``Secretary'') pursuant to section 207 of the National Housing
Act [12 U.S.C. 1713], if the debentures to be issued in payment of such
insured obligations are guaranteed as to principal and interest by the
United States, or obligations, participations, or other instruments of
or issued by the Federal National Mortgage Association, or the
Government National Mortgage Association, or mortgages, obligations or
other securities which are or ever have been sold by the Federal Home
Loan Mortgage Corporation pursuant to section 305 or section 306 of the
Federal Home Loan Mortgage Corporation Act [12 U.S.C. 1454 or 1455], or
obligations of the Federal Financing Bank or obligations of the
Environmental Financing Authority, or obligations or other instruments
or securities of the Student Loan Marketing Association, or such
obligations of any local public agency (as defined in section 110(h) of
the Housing Act of 1949 [42 U.S.C. 1460(h)]) as are secured by an
agreement between the local public agency and the Secretary in which the
local public agency agrees to borrow from said Secretary, and said
Secretary agrees to lend to said local public agency, monies in an
aggregate amount which (together with any other monies irrevocably
committed to the payment of interest on such obligations) will suffice
to pay, when due, the interest on and all installments (including the
final installment) of the principal of such obligations, which monies
under the terms of said agreement are required to be used for such
payments, or such obligations of a public housing agency (as defined in
the United States Housing Act of 1937, as amended [42 U.S.C. 1437 et
seq.]) as are secured (1) by an agreement between the public housing
agency and the Secretary in which the public housing agency agrees to
borrow from the Secretary, and the Secretary agrees to lend to the
public housing agency, prior to the maturity of such obligations, monies
in an amount which (together with any other monies irrevocably committed
to the payment of interest on such obligations) will suffice to pay the
principal of such obligations with interest to maturity thereon, which
monies under the terms of said agreement are required to be used for the
purpose of paying the principal of and the interest on such obligations
at their maturity, (2) by a pledge of annual contributions under an
annual contributions contract between such public housing agency and the
Secretary if such contract shall contain the covenant by the Secretary
which is authorized by subsection (g) of section 6 of the United States
Housing Act of 1937, as amended [42 U.S.C. 1437d(g)], and if the maximum
sum and the maximum period specified in such contract pursuant to said
subsection 6(g) [42 U.S.C. 1437d(g)] shall not be less than the annual
amount and the period for payment which are requisite to provide for the
payment when due of all installments of principal and interest on such
obligations, or (3) by a pledge of both annual contributions under an
annual contributions contract containing the covenant by the Secretary
which is authorized by section 6(g) of the United States Housing Act of
1937 [42 U.S.C. 1437d(g)], and a loan under an agreement between the
local public housing agency and the Secretary in which the public
housing agency agrees to borrow from the Secretary, and the Secretary
agrees to lend to the public housing agency, prior to the maturity of
the obligations involved, moneys in an amount which (together with any
other moneys irrevocably committed under the annual contributions
contract to the payment of principal and interest on such obligations)
will suffice to provide for the payment when due of all installments of
principal and interest on such obligations, which moneys under the terms
of the agreement are required to be used for the purpose of paying the
principal and interest on such obligations at their maturity: Provided,
That in carrying on the business commonly known as the safe-deposit
business the association shall not invest in the capital stock of a
corporation organized under the law of any State to conduct a safe-
deposit business in an amount in excess of 15 per centum of the capital
stock of the association actually paid in and unimpaired and 15 per
centum of its unimpaired surplus. The limitations and restrictions
herein contained as to dealing in and underwriting investment securities
shall not apply to obligations issued by the International Bank for
Reconstruction and Development, the European Bank for Reconstruction and
Development, the Inter-American Development Bank \1\ Bank for Economic
Cooperation and Development in the Middle East and North Africa,,\2\ the
North American Development Bank, the Asian Development Bank, the African
Development Bank, the Inter-American Investment Corporation, or the
International Finance Corporation,,\2\ or obligations issued by any
State or political subdivision or any agency of a State or political
subdivision for housing, university, or dormitory purposes, which are at
the time eligible for purchase by a national bank for its own account,
nor to bonds, notes and other obligations issued by the Tennessee Valley
Authority or by the United States Postal Service: Provided, That no
association shall hold obligations issued by any of said organizations
as a result of underwriting, dealing, or purchasing for its own account
(and for this purpose obligations as to which it is under commitment
shall be deemed to be held by it) in a total amount exceeding at any one
time 10 per centum of its capital stock actually paid in and unimpaired
and 10 per centum of its unimpaired surplus fund. Notwithstanding any
other provision in this paragraph, the association may purchase for its
own account shares of stock issued by a corporation authorized to be
created pursuant to title IX of the Housing and Urban Development Act of
1968 [42 U.S.C. 3931 et seq.], and may make investments in a
partnership, limited partnership, or joint venture formed pursuant to
section 907(a) or 907(c) of that Act [42 U.S.C. 3937(a) or 3937(c)].
Notwithstanding any other provision of this paragraph, the association
may purchase for its own account shares of stock issued by any State
housing corporation incorporated in the State in which the association
is located and may make investments in loans and commitments for loans
to any such corporation: Provided, That in no event shall the total
amount of such stock held for its own account and such investments in
loans and commitments made by the association exceed at any time 5 per
centum of its capital stock actually paid in and unimpaired plus 5 per
centum of its unimpaired surplus fund. Notwithstanding any other
provision in this paragraph, the association may purchase for its own
account shares of stock issued by a corporation organized solely for the
purpose of making loans to farmers and ranchers for agricultural
purposes, including the breeding, raising, fattening, or marketing of
livestock. However, unless the association owns at least 80 per centum
of the stock of such agricultural credit corporation the amount invested
by the association at any one time in the stock of such corporation
shall not exceed 20 per centum of the unimpaired capital and surplus of
the association: Provided further, That notwithstanding any other
provision of this paragraph, the association may purchase for its own
account shares of stock of a bank insured by the Federal Deposit
Insurance Corporation or a holding company which owns or controls such
an insured bank if the stock of such bank or company is owned
exclusively (except to the extent directors' qualifying shares are
required by law) by depository institutions or depository institution
holding companies (as defined in section 1813 of this title) and such
bank or company and all subsidiaries thereof are engaged exclusively in
providing services to or for other depository institutions, their
holding companies, and the officers, directors, and employees of such
institutions and companies, and in providing correspondent banking
services at the request of other depository institutions or their
holding companies (also referred to as a ``banker's bank''), but in no
event shall the total amount of such stock held by the association in
any bank or holding company exceed at any time 10 per centum of the
association's capital stock and paid in and unimpaired surplus and in no
event shall the purchase of such stock result in an association's
acquiring more than 5 per centum of any class of voting securities of
such bank or company. The limitations and restrictions contained in this
paragraph as to an association purchasing for its own account investment
securities shall not apply to securities that (A) are offered and sold
pursuant to section 4(5) of the Securities Act of 1933 (15 U.S.C.
77d(5)); (B) are small business related securities (as defined in
section 3(a)(53) of the Securities Exchange Act of 1934 [15 U.S.C.
78c(a)(53)]); or (C) are mortgage related securities (as that term is
defined in section 3(a)(41) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)(41)).\3\ The exception provided for the securities
described in subparagraphs (A), (B), and (C) shall be subject to such
regulations as the Comptroller of the Currency may prescribe, including
regulations prescribing minimum size of the issue (at the time of
initial distribution) or minimum aggregate sales prices, or both.
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\1\ So in original. Probably should be followed by a comma.
\2\ So in original.
\3\ So in original. The period probably should be preceded by an
additional closing parenthesis.
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A national banking association may deal in, underwrite, and purchase
for such association's own account qualified Canadian government
obligations to the same extent that such association may deal in,
underwrite, and purchase for such association's own account obligations
of the United States or general obligations of any State or of any
political subdivision thereof. For purposes of this paragraph--
(1) the term ``qualified Canadian government obligations'' means
any debt obligation which is backed by Canada, any Province of
Canada, or any political subdivision of any such Province to a
degree which is comparable to the liability of the United States,
any State, or any political subdivision thereof for any obligation
which is backed by the full faith and credit of the United States,
such State, or such political subdivision, and such term includes
any debt obligation of any agent of Canada or any such Province or
any political subdivision of such Province if--
(A) the obligation of the agent is assumed in such agent's
capacity as agent for Canada or such Province or such political
subdivision; and
(B) Canada, such Province, or such political subdivision on
whose behalf such agent is acting with respect to such
obligation is ultimately and unconditionally liable for such
obligation; and
(2) the term ``Province of Canada'' means a Province of Canada
and includes the Yukon Territory and the Northwest Territories and
their successors.
In addition to the provisions in this paragraph for dealing in,
underwriting, or purchasing securities, the limitations and restrictions
contained in this paragraph as to dealing in, underwriting, and
purchasing investment securities for the national bank's own account
shall not apply to obligations (including limited obligation bonds,
revenue bonds, and obligations that satisfy the requirements of section
142(b)(1) of title 26) issued by or on behalf of any State or political
subdivision of a State, including any municipal corporate
instrumentality of 1 or more States, or any public agency or authority
of any State or political subdivision of a State, if the national bank
is well capitalized (as defined in section 1831o of this title).
Eighth. To contribute to community funds, or to charitable,
philanthropic, or benevolent instrumentalities conducive to public
welfare, such sums as its board of directors may deem expedient and in
the interests of the association, if it is located in a State the laws
of which do not expressly prohibit State banking institutions from
contributing to such funds or instrumentalities.
Ninth. To issue and sell securities which are guaranteed pursuant to
section 1721(g) of this title.
Tenth. To invest in tangible personal property, including, without
limitation, vehicles, manufactured homes, machinery, equipment, or
furniture, for lease financing transactions on a net lease basis, but
such investment may not exceed 10 percent of the assets of the
association.
Eleventh. To make investments designed primarily to promote the
public welfare, including the welfare of low- and moderate-income
communities or families (such as by providing housing, services, or
jobs). A national banking association may make such investments directly
or by purchasing interests in an entity primarily engaged in making such
investments. An association shall not make any such investment if the
investment would expose the association to unlimited liability. The
Comptroller of the Currency shall limit an association's investments in
any 1 project and an association's aggregate investments under this
paragraph. An association's aggregate investments under this paragraph
shall not exceed an amount equal to the sum of 5 percent of the
association's capital stock actually paid in and unimpaired and 5
percent of the association's unimpaired surplus fund, unless the
Comptroller determines by order that the higher amount will pose no
significant risk to the affected deposit insurance fund, and the
association is adequately capitalized. In no case shall an association's
aggregate investments under this paragraph exceed an amount equal to the
sum of 10 percent of the association's capital stock actually paid in
and unimpaired and 10 percent of the association's unimpaired surplus
fund.
(R.S. Sec. 5136; July 1, 1922, ch. 257, Sec. 1, 42 Stat. 767; Feb. 25,
1927, ch. 191, Sec. 2, 44 Stat. 1226; June 16, 1933, ch. 89, Sec. 16, 48
Stat. 184; Aug. 23, 1935, ch. 614, title III, Sec. 308, 49 Stat. 709;
Feb. 3, 1938, ch. 13, Sec. 13, 52 Stat. 26; June 11, 1940, ch. 301, 54
Stat. 261; June 29, 1949, ch. 276, Sec. 1, 63 Stat. 298; July 15, 1949,
ch. 338, title VI, Sec. 602(a), 63 Stat. 439; Apr. 9, 1952, ch. 169, 66
Stat. 49; Aug. 2, 1954, ch. 649, title II, Sec. 203, 68 Stat. 622; Aug.
23, 1954, ch. 834, Sec. 2, 68 Stat. 771; July 26, 1956, ch. 741, title
II, Sec. 201(c), 70 Stat. 667; Pub. L. 86-137, Sec. 2, Aug. 6, 1959, 73
Stat. 285; Pub. L. 86-147, Sec. 10, Aug. 7, 1959, 73 Stat. 301; Pub. L.
86-230, Sec. 1(a), Sept. 8, 1959, 73 Stat. 457; Pub. L. 86-278, Sept.
16, 1959, 73 Stat. 563; Pub. L. 86-372, title IV, Sec. 420, Sept. 23,
1959, 73 Stat. 679; Pub. L. 88-560, title VII, Sec. 701(c), Sept. 2,
1964, 78 Stat. 800; Pub. L. 89-369, Sec. 10, Mar. 16, 1966, 80 Stat. 72;
Pub. L. 89-754, title V, Sec. 504(a)(1), Nov. 3, 1966, 80 Stat. 1277;
Pub. L. 90-19, Sec. 27(a), May 25, 1967, 81 Stat. 28; Pub. L. 90-448,
title VIII, Secs. 804(c), 807(j), title IX, Sec. 911, title XVII,
Sec. 1705(h), Aug. 1, 1968, 82 Stat. 543, 545, 550, 605; Pub. L. 91-375,
Sec. 6(d), Aug. 12, 1970, 84 Stat. 776; Pub. L. 92-318, title I,
Sec. 133(c)(1), June 23, 1972, 86 Stat. 269; Pub. L. 91-143, Sec. 12(b),
Dec. 9, 1969, as added Pub. L. 92-349, title I, Sec. 101, July 13, 1972,
86 Stat. 466; Pub. L. 92-500, Sec. 12(n), Oct. 18, 1972, 86 Stat. 902;
Pub. L. 93-100, Sec. 5(c), Aug. 16, 1973, 87 Stat. 344; Pub. L. 93-224,
Sec. 14, Dec. 29, 1973, 87 Stat. 941; Pub. L. 93-234, title II,
Sec. 207, Dec. 31, 1973, 87 Stat. 984; Pub. L. 93-383, title II,
Sec. 206, title VIII, Sec. 805(c)(1), Aug. 22, 1974, 88 Stat. 668, 726;
Pub. L. 96-221, title VII, Sec. 711, Mar. 31, 1980, 94 Stat. 189; Pub.
L. 97-35, title XIII, Sec. 1342(a), Aug. 13, 1981, 95 Stat. 743; Pub. L.
97-320, title IV, Sec. 404(b), Oct. 15, 1982, 96 Stat. 1511; Pub. L. 97-
457, Sec. 18, Jan. 12, 1983, 96 Stat. 2509; Pub. L. 98-440, title I,
Sec. 105(c), Oct. 3, 1984, 98 Stat. 1691; Pub. L. 98-473, title I,
Sec. 101(1) [title I, Sec. 101], Oct. 12, 1984, 98 Stat. 1884, 1885;
Pub. L. 100-86, title I, Sec. 108, Aug. 10, 1987, 101 Stat. 579; Pub. L.
100-449, title III, Sec. 308, Sept. 28, 1988, 102 Stat. 1877; Pub. L.
101-513, title V, Sec. 562(c)(10)(B), (e)(1)(B), Nov. 5, 1990, 104 Stat.
2036, 2037; Pub. L. 102-485, Sec. 6(a), Oct. 23, 1992, 106 Stat. 2774;
Pub. L. 103-182, title V, Sec. 541(h)(1), Dec. 8, 1993, 107 Stat. 2167;
Pub. L. 103-325, title II, Sec. 206(c), title III, Secs. 322(a)(1),
347(b), Sept. 23, 1994, 108 Stat. 2199, 2226, 2241; Pub. L. 104-208,
div. A, title I, Sec. 101(c) [title VII, Sec. 710(b)], title II,
Sec. 2704(d)(7), Sept. 30, 1996, 110 Stat. 3009-121, 3009-181, 3009-489;
Pub. L. 106-102, title I, Sec. 151, Nov. 12, 1999, 113 Stat. 1384.)
References in Text
Title 62 of the Revised Statutes, referred to in par. Seventh, was
in the original ``this Title'' meaning title LXII of the Revised
Statutes, consisting of R.S. Secs. 5133 to 5244, which are classified to
sections 21, 22 to 24a, 25a, 26, 27, 29, 35 to 37, 39, 43, 52, 53, 55 to
57, 59 to 62, 66, 71, 72 to 76, 81, 83 to 86, 90, 91, 93, 93a, 94, 141
to 144, 161, 164, 181, 182, 192 to 194, 196, 215c, 481 to 485, 501, 541,
548, and 582 of this title. See, also, sections 8, 333, 334, 475, 656,
709, 1004, and 1005 of Title 18, Crimes and Criminal Procedure. For
complete classification of R.S. Secs. 5133 to 5244 to the Code, see
Tables.
Section 9 of the National Capital Transportation Act of 1969,
referred to in par. Seventh, is section 9 of Pub. L. 91-143, as added by
section 101 of title I of Pub. L. 92-349, July 13, 1972, 86 Stat. 464,
which is not classified to the Code.
The Federal Farm Loan Act, referred to in par. Seventh, is act July
17, 1916, ch. 245, 39 Stat. 360, which was classified to section 641 et
seq. of this title prior to its repeal by Pub. L. 92-181, Sec. 5.26(a),
Dec. 10, 1971, 85 Stat. 624. See chapter 23 (Sec. 2001 et seq.) of this
title.
The National Housing Act, referred to in par. Seventh, is act June
27, 1934, ch. 847, 48 Stat. 1246, as amended. Title XI of the National
Housing Act is title XI of act June 27, 1934, ch. 847, as added by act
Nov. 3, 1966, Pub. L. 89-754, title V, Sec. 502(a), 80 Stat. 1274, which
is classified generally to subchapter IX-B (Sec. 1749aaa et seq.) of
chapter 13 of this title. For complete classification of this Act to the
Code, see section 1701 of this title and Tables.
Section 110 of the Housing Act of 1949 [42 U.S.C. 1460], referred to
in par. Seventh, was omitted from the Code pursuant to section 5316 of
Title 42, The Public Health and Welfare, which terminated authority to
make grants or loans under title I of that Act [42 U.S.C. 1450 et seq.]
after Jan. 1, 1975.
The United States Housing Act of 1937, referred to in par. Seventh,
is act Sept. 1, 1937, ch. 896, as revised generally by Pub. L. 93-383,
title II, Aug. 22, 1974, 88 Stat. 653, and is classified to chapter 8
(Sec. 1437 et seq.) of Title 42. For complete classification of this Act
to the Code, see Short Title note set out under section 1437 of Title 42
and Tables.
The Housing and Urban Development Act of 1968, referred to in par.
Seventh, is Pub. L. 90-448, Aug. 1, 1968, 82 Stat. 476, as amended.
Title IX of the Housing and Urban Development Act is classified
principally to chapter 49 (Sec. 3931 et seq.) of Title 42. For complete
classification of this Act to the Code, see Short Title of 1968
Amendment note set out under section 1701 of this title and Tables.
Codification
Amendment by Pub. L. 98-473 is based on section 211(a) of title II
of S. 2416, as introduced in the Senate on Mar. 13, 1984, which was
enacted into permanent law by section 101(1) of Pub. L. 98-473.
R.S. Sec. 5136 derived from act June 3, 1864, ch. 106, Sec. 8, 13
Stat. 101, which was the National Bank Act. See section 38 of this
title.
Amendments
1999--Par. Seventh. Pub. L. 106-102 inserted at end ``In addition to
the provisions in this paragraph for dealing in, underwriting, or
purchasing securities, the limitations and restrictions contained in
this paragraph as to dealing in, underwriting, and purchasing investment
securities for the national bank's own account shall not apply to
obligations (including limited obligation bonds, revenue bonds, and
obligations that satisfy the requirements of section 142(b)(1) of title
26) issued by or on behalf of any State or political subdivision of a
State, including any municipal corporate instrumentality of 1 or more
States, or any public agency or authority of any State or political
subdivision of a State, if the national bank is well capitalized (as
defined in section 1831o of this title).''
1996--Par. Seventh. Pub. L. 104-208, Sec. 101(c) [Sec. 710(b)], in
seventh sentence, inserted ``Bank for Economic Cooperation and
Development in the Middle East and North Africa,'' after ``the Inter-
American Development Bank''.
Par. Eleventh. Pub. L. 104--208, Sec. 2704(d)(7), which directed the
amendment of the fifth sentence by substituting ``Deposit Insurance
Fund'' for ``affected deposit insurance fund'', was not executed. See
Effective Date of 1996 Amendment note below.
1994--Par. Seventh. Pub. L. 103-325, Sec. 347(b), in last sentence
of first par., substituted ``(15 U.S.C. 78c(a)(41)). The exception
provided for the securities described in subparagraphs (A), (B), and (C)
shall be subject to such regulations'' for ``(15 U.S.C. 78c(a)(41))),
subject to such regulations''.
Pub. L. 103-325, Sec. 322(a)(1)(A), in fifth proviso inserted ``or
depository institution holding companies (as defined in section 1813 of
this title)'' after ``(except to the extent directors' qualifying shares
are required by law) by depository institutions''.
Pub. L. 103-325, Sec. 322(a)(1)(B), which directed substitution in
fifth proviso of ``services to or for other depository institutions,
their holding companies, and the officers, directors, and employees of
such institutions and companies, and in providing correspondent banking
services at the request of other depository institutions or their
holding companies (also referred to as a `banker's bank')'' for
``services for other depository institutions and their officers,
directors and employees'', was executed by making the substitution for
``services for other depository institutions and their officers,
directors, and employees'' to reflect the probable intent of Congress.
Pub. L. 103-325, Sec. 206(c), substituted ``(B) are small business
related securities (as defined in section 3(a)(53) of the Securities
Exchange Act of 1934); or (C) are mortgage related securities'' for ``or
(B) are mortgage related securities''.
1993--Par. Seventh. Pub. L. 103-182 inserted ``the North American
Development Bank,'' after ``Inter-American Development Bank,''.
1992--Par. Eleventh. Pub. L. 102-485 added par. Eleventh.
1990--Par. Seventh. Pub. L. 101-513 inserted ``the European Bank for
Reconstruction and Development,'' before ``the Inter-American
Development Bank,'' and substituted ``the African Development Bank, the
Inter-American Investment Corporation, or the International Finance
Corporation,'' for ``the African Development Bank or the Inter-American
Investment Corporation,''.
1988--Par. Seventh. Pub. L. 100-449 inserted provisions authorizing
national banking associations to deal in, underwrite, and purchase
Canadian government obligations for the association's own account.
1987--Par. Tenth. Pub. L. 100-86 added par. Tenth.
1984--Par. Seventh. Pub. L. 98-473 inserted reference to the Inter-
American Investment Corporation.
Pub. L. 98-440 inserted provision that the limitations and
restrictions contained in this paragraph as to an association purchasing
investment securities for its own account shall not apply to securities
offered and sold pursuant to section 15 U.S.C. 77d(5), or that are
mortgage related securities (as defined in 15 U.S.C. 78c(a)(41)),
subject to such regulations as the Comptroller of the Currency may
prescribe.
1983--Par. Seventh. Pub. L. 97-457 substituted ``10 per centum of
the association's'' for ``10 per centum of its'' after ``exceed at any
time''.
1982--Par. Seventh. Pub. L. 97-320 substituted ``Provided further,
That notwithstanding any other provision of this paragraph, the
association may purchase for its own account shares of stock of a bank
insured by the Federal Deposit Insurance Corporation or a holding
company which owns or controls such an insured bank if the stock of such
bank or company is owned exclusively (except to the extent directors'
qualifying shares are required by law) by depository institutions and
such bank or company and all subsidiaries thereof are engaged
exclusively in providing services for other depository institutions and
their officers, directors, and employees, but in no event shall the
total amount of such stock held by the association in any bank or
holding company exceed at any time 10 per centum of its capital stock
and paid in and unimpaired surplus and in no event shall the purchase of
such stock result in an association's acquiring more than 5 per centum
of any class of voting securities of such bank or company'' for
``Provided further, That, notwithstanding any other provision of this
paragraph, the association may purchase for its own account shares of
stock of a bank insured by the Federal Deposit Insurance Corporation if
the stock of such bank is owned exclusively by other banks (except to
the extent State law requires directors qualifying shares) and if such
bank is engaged exclusively in providing banking services for other
banks and their officers, directors, or employees, but in no event shall
the total amount of such stock held by the association exceed at any
time 10 per centum of its capital stock and paid in and unimpaired
surplus, and in no event shall the purchase of such stock result in the
association's acquiring more than 5 per centum of any class of voting
securities of such bank''.
1981--Par. Seventh. Pub. L. 97-35 inserted reference to the African
Development Bank.
1980--Par. Seventh. Pub. L. 96-221 inserted proviso relating to
purchase of stock in bankers' banks.
1974--Par. Seventh. Pub. L. 93-383 substituted ``section 6(g) of the
United States Housing Act of 1937'' for references to section 1421a(b)
of title 42 wherever appearing, struck out ``either'' before ``(1)'',
``(which obligations shall have a maturity of not more than eighteen
months)'' in cl. (1) and ``or'' before ``(2)'', added cl. (3), and
inserted reference to mortgages, obligations, or other securities sold
by the Federal Home Loan Mortgage Corporation pursuant to section 1454
or 1455 of this title.
1973--Par. Seventh. Pub. L. 93-234 authorized investments by
national banks in agricultural credit corporations.
Pub. L. 93-224 inserted ``or obligations of the Federal Financing
Bank'' after ``or obligations, participations, or other instruments of
or issued by the Federal National Mortgage Association or the Government
National Mortgage Association''.
Pub. L. 93-100 inserted provision that the association may purchase
shares of stock issued by state housing corporations incorporated in the
state in which the association is located and make investments in loans
and commitments for loans to such corporations with certain limitations.
1972--Par. Seventh. Pub. L. 92-500 inserted ``or obligations of the
Environmental Financing Authority'' after ``Government National Mortgage
Association''.
Pub. L. 92-349 inserted provisions that limitations and restrictions
contained in this section as to dealing in and underwriting investment
securities shall not apply to obligations of the Washington Metropolitan
Area Transit Authority which are guaranteed by the Secretary of
Transportation under section 9 of the National Capital Transportation
Act of 1969.
Pub. L. 92-318 included obligations or other instruments or
securities of the Student Loan Marketing Association.
1970--Par. Seventh. Pub. L. 91-375 made limitations and restrictions
contained in this section as to dealing in and underwriting investment
securities inapplicable to bonds, notes and other obligations issued by
the United States Postal Service.
1968--Par. Seventh. Pub. L. 90-448, Sec. 807(j), inserted ``or the
Government National Mortgage Association'' after ``Federal National
Mortgage Association''.
Pub. L. 90-448, Sec. 911, authorized the association to purchase for
its own account shares of stock issued by a corporation authorized to be
created pursuant to sections 3931-3940 of title 42, and to make
investments in a partnership, limited partnership, or joint venture
formed pursuant to section 3937(a) or 3937(c) of title 42.
Pub. L. 90-448, Sec. 1705(h), included obligations issued by any
State or political subdivision or any agency of a State or political
subdivision for housing, university, or dormitory purposes.
Par. Ninth. Pub. L. 90-448, Sec. 804(c), added par. Ninth.
1967--Par. Seventh. Pub. L. 90-19 substituted ``Secretary of Housing
and Urban Development (hereafter in this sentence referred to as the
`Secretary')'' for ``Federal Housing Administrator''; and ``Secretary''
for ``Housing and Home Finance Administrator'' after ``local public
agency and the'', for ``Administrator'' in two instances just before
``agrees to lend'', and for ``Public Housing Administration'' wherever
appearing in cls. (1) and (2), respectively.
1966--Par. Seventh. Pub. L. 89-754 made limitations and restrictions
for dealing, underwriting, and purchasing for its own account of
investment securities inapplicable to obligations which are insured by
Secretary of Housing and Urban Development under provisions relating to
mortgage insurance for group practice facilities.
Pub. L. 89-369 inserted provisions that limitations and restrictions
contained in this section as to dealing in and underwriting investment
securities shall not apply to obligations issued by the Asian
Development Bank.
1964--Par. Seventh. Pub. L. 88-560 substituted ``or obligations,
participations, or other instruments of or issued by the Federal
National Mortgage Association'' for ``or obligations of the Federal
National Mortgage Association''.
1959--Par. Seventh. Pub. L. 86-372 substituted ``monies in an
aggregate amount which (together with any other monies irrevocably
committed to the payment of interest on such obligations) will suffice
to pay, when due, the interest on and all installments (including the
final installment) of the principal of such obligations, which monies
under the terms of said agreement are required to be used for such
payments'' for ``prior to the maturity of such obligations (which
obligations shall have a maturity of not more than eighteen months),
monies in an amount which (together with any other monies irrevocably
committed to the payment of interest on such obligations) will suffice
to pay the principal of such obligations with interest to maturity
thereon, which monies under the terms of said agreement are required to
be used for the purpose of paying the principal of and the interest on
such obligations at their maturity'' after ``local public agency,''.
Pub. L. 86-278 substituted ``any'' for ``either'' before ``of said
organizations'' in last sentence.
Pub. L. 86-230 struck out ``or the Home Owners' Loan Corporation''
after ``Federal Home Loan Banks''.
Pub. L. 86-147 inserted provisions that limitations and restrictions
contained in this section as to dealing in and underwriting investment
securities shall not apply to obligations issued by the Inter-American
Development Bank.
Pub. L. 86-137 inserted provisions that limitations and restrictions
contained in this section as to dealing in and underwriting investment
securities shall not apply to bonds, notes and other obligations issued
by the Tennessee Valley Authority.
1959--Par. Seventh. Pub. L. 86-372 substituted ``monies in an
aggregate amount which (together with any other monies irrevocably
committed to the payment of interest on such obligations) will suffice
to pay, when due, the interest on and all installments (including the
final installment) of the principal of such obligations, which monies
under the terms of said agreement are required to be used for such
payments'' for ``prior to the maturity of such obligations (which
obligations shall have a maturity of not more than eighteen months),
monies in an amount which (together with any other monies irrevocably
committed to the payment of interest on such obligations) will suffice
to pay the principal of such obligations with interest to maturity
thereon, which monies under the terms of said agreement are required to
be used for the purpose of paying the principal of and the interest on
such obligations at their maturity'' following ``local public agency,''.
Pub. L. 86-278 substituted ``any'' for ``either'' before ``of said
organizations'' in last sentence.
Pub. L. 86-230 struck out ``or the Home Owners' Loan Corporation''
after ``Federal Home Loan Banks''.
Pub. L. 86-147 inserted provisions that limitations and restrictions
contained in this section as to dealing in and underwriting investment
securities shall not apply to obligations issued by the Inter-American
Development Bank.
Pub. L. 86-137 inserted provisions that limitations and restrictions
contained in this section as to dealing in and underwriting investment
securities shall not apply to bonds, notes and other obligations issued
by the Tennessee Valley Authority.
1956--Par. Seventh. Act July 26, 1956, removed restriction which
prohibited a national bank from investing in obligations of the thirteen
banks for cooperatives an amount exceeding 10 percent of its capital
stock actually paid in and unimpaired and 10 percent of its unimpaired
surplus.
1954--Par. Seventh. Act Aug. 23, 1954, substituted ``thirteen banks
for cooperatives organized under the Farm Credit Act of 1933, or any of
them'' for ``Central Bank for Cooperatives'' in last sentence.
Act Aug. 2, 1954, substituted ``or obligations of the Federal
National Mortgage Association'' for ``or obligations of national
mortgage associations'' in sixth sentence.
1952--Par. Seventh. Act Apr. 9, 1952, enabled national banks and
State member banks of the Federal Reserve System to receive compensation
in the distribution of debentures issued by the Central Bank for
Cooperation.
1949--Par. Seventh. Act July 15, 1949, inserted, in next to last
sentence, ``or such obligations of any local public agency (as defined
in section 110(h) of the Housing Act of 1949) as are secured by an
agreement between the local public agency and the Housing and Home
Finance Administrator in which the local public agency agrees to borrow
from said Administrator, and said Administrator agrees to lend to said
local public agency, prior to the maturity of such obligations (which
obligations shall have a maturity of not more than eighteen months),
monies in an amount which (together with any other monies irrevocably
committed to the payment of interest on such obligations) will suffice
to pay the principal of such obligations with interest to maturity
thereon, which monies under the terms of said agreement are required to
be used for the purpose of paying the principal of and the interest on
such obligations at their maturity, or such obligations of a public
housing agency (as defined in the United States Housing Act of 1937, as
amended) as are secured either (1) by an agreement between the public
housing agency and the Public Housing Administration in which the public
housing agency agrees to borrow from the Public Housing Administration,
and the Public Housing Administration agrees to lend to the public
housing agency, prior to the maturity of such obligations (which
obligations shall have a maturity of not more than eighteen months),
monies in an amount which (together with any other monies irrevocably
committed to the payment of interest on such obligations) will suffice
to pay the principal of such obligations with interest to maturity
thereon, which monies under the terms of said agreement are required to
be used for the purpose of paying the principal of and the interest on
such obligations at their maturity, or (2) by a pledge of annual
contributions under an annual contributions contract between such public
housing agency and the Public Housing Administration if such contract
shall contain the covenant by the Public Housing Administration which is
authorized by subsection (b) of section 22 of the United States Housing
Act of 1937, as amended, and if the maximum sum and the maximum period
specified in such contract pursuant to said subsection 22(b) shall not
be less than the annual amount and the period for payment, which are
requisite to provide for the payment when due of all installments of
principal and interest on such obligations''.
Act June 29, 1949, inserted last sentence to permit national banks
and State member banks of the Federal Reserve System to deal in and
underwrite obligations issued by the International Bank subject to
certain limitations.
1940--Par. Eighth. Act June 11, 1940, added par. Eighth.
1938--Par. Seventh. Act Feb. 3, 1938, inserted ``or obligations of
national mortgage associations'' in last sentence.
1935--Par. Seventh. Act Aug. 23, 1935, amended second, fourth, and
last sentences.
1933--Act June 16, 1933, among other changes, struck out closing
paragraph prohibiting transaction of any business by association prior
to authorization by Comptroller, except that necessarily preliminary to
organization.
1927--Act Feb. 25, 1927, struck out definite period of succession in
par. Second, and inserted provisos in par. Seventh.
Effective Date of 1999 Amendment
Pub. L. 106-102, title I, Sec. 161, Nov. 12, 1999, 113 Stat. 1384,
provided that: ``This title [enacting sections 24a, 1820a, 1828a, 1828b,
1831v, 1831w, and 1848a of this title and section 6701 of Title 15,
Commerce and Trade, amending this section, sections 25a, 335, 371c,
1821, 1835a, 1841 to 1844, 1849, 1850, 1864, 1971, 2903, 3101, 3106, and
3107 of this title, and section 18a of Title 15, repealing sections 78
and 377 of this title, and enacting provisions set out as notes under
sections 252, 1843, and 4801 of this title and section 41 of Title 15]
(other than section 104 [enacting section 6701 of Title 15]) and the
amendments made by this title shall take effect 120 days after the date
of the enactment of this Act [Nov. 12, 1999].''
Effective Date of 1996 Amendment
Amendment by section 2704(d)(7) of Pub. L. 104-208 effective Jan. 1,
1999, if no insured depository institution is a savings association on
that date, see section 2704(c) of Pub. L. 104-208, set out as a note
under section 1821 of this title.
Effective Date of 1994 Amendment
Section 347(d) of Pub. L. 103-325 provided that: ``The amendments
made by this section [amending this section and section 78c of Title 15,
Commerce and Trade] shall become effective upon the date of promulgation
of final regulations under subsection (c) [set out below].''
Effective and Termination Dates of 1988 Amendment
Amendment by Pub. L. 100-449 effective on date United States-Canada
Free-Trade Agreement enters into force (Jan. 1, 1989), and to cease to
have effect on date Agreement ceases to be in force, see section 501(a),
(c) of Pub. L. 100-449, set out in a note under section 2112 of Title
19, Customs Duties.
Effective Date of 1981 Amendment
Amendment by Pub. L. 97-35 effective Aug. 13, 1981, see section 1372
of Pub. L. 97-35, set out as an Effective Date note under section 290i
of Title 22, Foreign Relations and Intercourse.
Effective Date of 1973 Amendments
Amendment by Pub. L. 93-224 effective Dec. 29, 1973, see section 20
of Pub. L. 93-224, set out as an Effective Date note under section 2281
of this title.
Amendment by Pub. L. 93-100 effective Aug. 16, 1973, see section 8
of Pub. L. 93-100, set out as an Effective Date note under section 1469
of this title.
Effective Date of 1970 Amendment
For effective date of amendment by Pub. L. 91-375, see section 15(a)
of Pub. L. 91-375, set out as an Effective Date note preceding section
101 of Title 39, Postal Service.
Effective Date of 1968 Amendment
For effective date of amendment by title VIII of Pub. L. 90-448, see
section 808 of Pub. L. 90-448, set out as an Effective Date note under
section 1716b of this title.
Effective Date of 1956 Amendment
Amendment by act July 26, 1956, effective Jan. 1, 1957, see section
202(a) of act July 26, 1956.
Effective Date of 1933 Amendment
Section 16 of act June 16, 1933, provided that restrictions of this
section as to dealing in investment securities shall take effect one
year after June 16, 1933.
Regulations
Section 347(c) of Pub. L. 103-325 provided that: ``Not later than 1
year after the date of enactment of this Act [Sept. 23, 1994], the
Comptroller of the Currency shall promulgate final regulations, in
accordance with the thirteenth sentence of Paragraph Seventh of section
5136 of the Revised Statutes [this section] (as amended by subsection
(b)), to carry out the amendments made by this section [amending this
section and section 78c of Title 15, Commerce and Trade].'' [Final
regulations implementing these amendments were published in the Federal
Register on Dec. 2, 1996 [61 F.R. 63972], effective Dec. 31, 1996.]
Exception as to Transfer of Functions
Functions vested by any provision of law in Comptroller of the
Currency, referred to in this section, not included in transfer of
functions to Secretary of the Treasury, see note set out under section 1
of this title.
Abolition of Home Owners' Loan Corporation
For dissolution and abolishment of Home Owners' Loan Corporation, by
act June 30, 1953, ch. 170, Sec. 21, 67 Stat. 126, see note set out
under section 1463 of this title.
Section Referred to in Other Sections
This section is referred to in sections 335, 371c, 378, 1464, 1733,
1841, 1843, 3102, 3201 of this title; title 15 section 78c; title 22
section 286k-2.
