§ 347b. — Advances to individual member banks on time or demand notes; maturities; time notes secured by mortgage loans covering onetofour family residences.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC347b]
TITLE 12--BANKS AND BANKING
CHAPTER 3--FEDERAL RESERVE SYSTEM
SUBCHAPTER IX--POWERS AND DUTIES OF FEDERAL RESERVE BANKS
Sec. 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, any deposit
insurance fund in 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
The term ``appropriate Federal banking agency'' has the same
meaning as in section 1813 of this title.
(B) Critically undercapitalized
The term ``critically undercapitalized'' has the same
meaning as in section 1831o of this title.
(C) Depository institution
The term ``depository institution'' has the same meaning as
in section 1813 of this title.
(D) Undercapitalized depository institution
The term ``undercapitalized depository institution'' means
any depository institution which--
(i) is undercapitalized, as defined in section 1831o 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, Sec. 10B, formerly Sec. 10(b), as added Feb. 27,
1932, ch. 58, Sec. 2, 47 Stat. 56; amended Feb. 3, 1933, ch. 34, 47
Stat. 794; Mar. 9, 1933, ch. 1, title IV, Sec. 402, 48 Stat. 7; Aug. 23,
1935, ch. 614, title II, Sec. 204, 49 Stat. 705; Pub. L. 93-449, Sec. 5,
Oct. 18, 1974, 88 Stat. 1368; Pub. L. 96-221, title I, Sec. 106, Mar.
31, 1980, 94 Stat. 140; renumbered Sec. 10B and amended Pub. L. 102-242,
title I, Sec. 142(a)(2), (b), Dec. 19, 1991, 105 Stat. 2279; Pub. L.
104-208, div. A, title II, Sec. 2704(d)(9), Sept. 30, 1996, 110 Stat.
3009-489.)
Amendments
1996--Subsec. (b)(3)(A)(ii). Pub. L. 104--208, which directed the
amendment of cl. (ii) by substituting ``the Deposit Insurance Fund of''
for ``any deposit insurance fund in'', was not executed. See Effective
Date of 1996 Amendment note below.
1991--Pub. L. 102-242, Sec. 142(b), designated existing provisions
as subsec. (a), inserted heading, and added subsec. (b).
1980--Pub. L. 96-221 struck out second sentence of first par.
relating to interest on notes under this section.
1974--Pub. L. 93-449 inserted provisions relating to advances on
time notes secured by mortgage loans covering one-to-four family
residences.
1935--Act Aug. 23, 1935, struck out provision prescribing
termination date of section.
1933--Act Mar. 9, 1933, struck out proviso which extended
applicability to member banks regardless of their capital, and empowered
President to extend termination date one year beyond March 3, 1934.
Act Feb. 3, 1933, extended termination date from ``March 3, 1933''
to ``March 3, 1934''.
Effective Date of 1996 Amendment
Amendment by 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 1991 Amendment
Section 142(d) of Pub. L. 102-242 provided that: ``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
[Dec. 19, 1991].''
Effective Date of 1980 Amendment
Amendment by Pub. L. 96-221 effective on first day of sixth month
which begins after Mar. 31, 1980, see section 108 of Pub. L. 96-221, set
out as a note under section 248 of this title.
Expiration
Proclamation No. 2076, Feb. 16, 1934, 48 Stat. 1734, extended
section to Mar. 3, 1935. See 1935 amendment note above.
Section Referred to in Other Sections
This section is referred to in sections 347a, 412, 463, 1831r of
this title.
