§ 347a. — Advances to member bank groups; inadequate amounts of eligible and acceptable assets; liability of individual banks in group; distribution of loans among banks of group; rate of interest; notes accepted for advances as collateral security for Federal reserve notes; foreign obligations as security for advances.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC347a]
TITLE 12--BANKS AND BANKING
CHAPTER 3--FEDERAL RESERVE SYSTEM
SUBCHAPTER IX--POWERS AND DUTIES OF FEDERAL RESERVE BANKS
Sec. 347a. Advances to member bank groups; inadequate amounts of
eligible and acceptable assets; liability of individual banks in
group; distribution of loans among banks of group; rate of
interest; notes accepted for advances as collateral security for
Federal reserve notes; foreign obligations as security for
advances
Upon receiving the consent of not less than five members of the
Board of Governors of the Federal Reserve System, any Federal reserve
bank may make advances, in such amount as the board of directors of such
Federal reserve bank may determine, to groups of five or more member
banks within its district, a majority of them independently owned and
controlled, upon their time or demand promissory notes, provided the
bank or banks which receive the proceeds of such advances as herein
provided have no adequate amounts of eligible and acceptable assets
available to enable such bank or banks to obtain sufficient credit
accommodations from the Federal reserve bank through rediscounts or
advances other than as provided in section 347b \1\ of this title. The
liability of the individual banks in each group must be limited to such
proportion of the total amount advanced to such group as the deposit
liability of the respective banks bears to the aggregate deposit
liability of all banks in such group, but such advances may be made to a
lesser number of such member banks if the aggregate amount of their
deposit liability constitutes at least 10 per centum of the entire
deposit liability of the member banks within such district. Such banks
shall be authorized to distribute the proceeds of such loans to such of
their number and in such amount as they may agree upon, but before so
doing they shall require such recipient banks to deposit with a suitable
trustee, representing the entire group, their individual notes made in
favor of the group protected by such collateral security as may be
agreed upon. Any Federal reserve bank making such advance shall charge
interest or discount thereon at a rate not less than 1 per centum above
its discount rate in effect at the time of making such advance. No such
note upon which advances are made by a Federal reserve bank under this
section shall be eligible under section 412 of this title as collateral
security for Federal reserve notes.
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\1\ See References in Text note below.
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No obligations of any foreign government, individual, partnership,
association, or corporation organized under the laws thereof shall be
eligible as collateral security for advances under this section.
Member banks are authorized to obligate themselves in accordance
with the provisions of this section.
(Dec. 23, 1913, ch. 6, Sec. 10A, formerly Sec. 10(a), as added Feb. 27,
1932, ch. 58, Sec. 1, 47 Stat. 56; amended Aug. 23, 1935, ch. 614, title
II, Sec. 203(a), 49 Stat. 704; renumbered Sec. 10A, Pub. L. 102-242,
title I, Sec. 142(a)(1), Dec. 19, 1991, 105 Stat. 2279.)
References in Text
Section 347b of this title, referred to in first par., was in the
original a reference to section 10(b), meaning section 10(b) of the
Federal Reserve Act. Section 10(b) of that Act was renumbered section
10B by Pub. L. 102-242, title I, Sec. 142(a)(2), Dec. 19, 1991, 105
Stat. 2279, without a corresponding amendment to this section.
Change of Name
Section 203(a) of act Aug. 23, 1935, changed name of Federal Reserve
Board to Board of Governors of the Federal Reserve System.
Section Referred to in Other Sections
This section is referred to in section 412 of this title.
