§ 461. — Reserve requirements.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC461]
TITLE 12--BANKS AND BANKING
CHAPTER 3--FEDERAL RESERVE SYSTEM
SUBCHAPTER XIV--BANK RESERVES
Sec. 461. Reserve requirements
(a) Establishment of applicable definitions, payment of interest,
obligations as deposits, and regulations
The Board is authorized for the purposes of this section to define
the terms used in this section, to determine what shall be deemed a
payment of interest, to determine what types of obligations, whether
issued directly by a member bank or indirectly by an affiliate of a
member bank or by other means, and, regardless of the use of the
proceeds, shall be deemed a deposit, and to prescribe such regulations
as it may deem necessary to effectuate the purposes of this section and
to prevent evasions thereof.
(b) Additional definitions; required amounts of reserves maintained
against transaction accounts; waiver of ratio limits in
extraordinary circumstances; supplemental reserves; reserves
related to foreign obligations or assets; exemption for certain
deposits; discount and borrowing; transitional adjustments;
additional exemptions and waivers
(1) The following definitions and rules apply to this subsection,
subsection (c) of this section, and sections 248-1, 248a, 342, 360, and
412 of this title:
(A) The term ``depository institution'' means--
(i) any insured bank as defined in section 3 of the Federal
Deposit Insurance Act [12 U.S.C. 1813] or any bank which is
eligible to make application to become an insured bank under
section 5 of such Act [12 U.S.C. 1815];
(ii) any mutual savings bank as defined in section 3 of the
Federal Deposit Insurance Act or any bank which is eligible to
make application to become an insured bank under section 5 of
such Act;
(iii) any savings bank as defined in section 3 of the
Federal Deposit Insurance Act or any bank which is eligible to
make application to become an insured bank under section 5 of
such Act;
(iv) any insured credit union as defined in section 1752 of
this title or any credit union which is eligible to make
application to become an insured credit union pursuant to
section 1781 of this title;
(v) any member as defined in section 1422 of this title;
(vi) any savings association (as defined in section 3 of the
Federal Deposit Insurance Act [12 U.S.C. 1813]) which is an
insured depository institution (as defined in such Act [12
U.S.C. 1811 et seq.]) or is eligible to apply to become an
insured depository institution under the Federal Deposit
Insurance Act; and
(vii) for the purpose of sections 248-1, 342 to 347, 347c,
347d, and 372 of this title, any association or entity which is
wholly owned by or which consists only of institutions referred
to in clauses (i) through (vi).
(B) The term ``bank'' means any insured or noninsured bank, as
defined in section 3 of the Federal Deposit Insurance Act [12 U.S.C.
1813], other than a mutual savings bank or a savings bank as defined
in such section.
(C) The term ``transaction account'' means a deposit or account
on which the depositor or account holder is permitted to make
withdrawals by negotiable or transferable instrument, payment orders
of withdrawal, telephone transfers, or other similar items for the
purpose of making payments or transfers to third persons or others.
Such term includes demand deposits, negotiable order of withdrawal
accounts, savings deposits subject to automatic transfers, and share
draft accounts.
(D) The term ``nonpersonal time deposits'' means a transferable
time deposit or account or a time deposit or account representing
funds deposited to the credit of, or in which any beneficial
interest is held by, a depositor who is not a natural person.
(E) The term ``reservable liabilities'' means transaction
accounts, nonpersonal time deposits, and all net balances, loans,
assets, and obligations which are, or may be, subject to reserve
requirements under paragraph (5).
(F) In order to prevent evasions of the reserve requirements
imposed by this subsection, after consultation with the Board of
Directors of the Federal Deposit Insurance Corporation, the Director
of the Office of Thrift Supervision, and the National Credit Union
Administration Board, the Board of Governors of the Federal Reserve
System is authorized to determine, by regulation or order, that an
account or deposit is a transaction account if such account or
deposit may be used to provide funds directly or indirectly for the
purpose of making payments or transfers to third persons or others.
(2)(A) Each depository institution shall maintain reserves against
its transaction accounts as the Board may prescribe by regulation solely
for the purpose of implementing monetary policy--
(i) in the ratio of 3 per centum for that portion of its total
transaction accounts of $25,000,000 or less, subject to subparagraph
(C); and
(ii) in the ratio of 12 per centum, or in such other ratio as
the Board may prescribe not greater than 14 per centum and not less
than 8 per centum, for that portion of its total transaction
accounts in excess of $25,000,000, subject to subparagraph (C).
(B) Each depository institution shall maintain reserves against its
nonpersonal time deposits in the ratio of 3 per centum, or in such other
ratio not greater than 9 per centum and not less than zero per centum as
the Board may prescribe by regulation solely for the purpose of
implementing monetary policy.
(C) Beginning in 1981, not later than December 31 of each year the
Board shall issue a regulation increasing for the next succeeding
calendar year the dollar amount which is contained in subparagraph (A)
or which was last determined pursuant to this subparagraph for the
purpose of such subparagraph, by an amount obtained by multiplying such
dollar amount by 80 per centum of the percentage increase in the total
transaction accounts of all depository institutions. The increase in
such transaction accounts shall be determined by subtracting the amount
of such accounts on June 30 of the preceding calendar year from the
amount of such accounts on June 30 of the calendar year involved. In the
case of any such 12-month period in which there has been a decrease in
the total transaction accounts of all depository institutions, the Board
shall issue such a regulation decreasing for the next succeeding
calendar year such dollar amount by an amount obtained by multiplying
such dollar amount by 80 per centum of the percentage decrease in the
total transaction accounts of all depository institutions. The decrease
in such transaction accounts shall be determined by subtracting the
amount of such accounts on June 30 of the calendar year involved from
the amount of such accounts on June 30 of the previous calendar year.
(D) Any reserve requirement imposed under this subsection shall be
uniformly applied to all transaction accounts at all depository
institutions. Reserve requirements imposed under this subsection shall
be uniformly applied to nonpersonal time deposits at all depository
institutions, except that such requirements may vary by the maturity of
such deposits.
(3) Upon a finding by at least 5 members of the Board that
extraordinary circumstances require such action, the Board, after
consultation with the appropriate committees of the Congress, may
impose, with respect to any liability of depository institutions,
reserve requirements outside the limitations as to ratios and as to
types of liabilities otherwise prescribed by paragraph (2) for a period
not exceeding 180 days, and for further periods not exceeding 180 days
each by affirmative action by at least 5 members of the Board in each
instance. The Board shall promptly transmit to the Congress a report of
any exercise of its authority under this paragraph and the reasons for
such exercise of authority.
(4)(A) The Board may, upon the affirmative vote of not less than 5
members, impose a supplemental reserve requirement on every depository
institution of not more than 4 per centum of its total transaction
accounts. Such supplemental reserve requirement may be imposed only if--
(i) the sole purpose of such requirement is to increase the
amount of reserves maintained to a level essential for the conduct
of monetary policy;
(ii) such requirement is not imposed for the purpose of reducing
the cost burdens resulting from the imposition of the reserve
requirements pursuant to paragraph (2);
(iii) such requirement is not imposed for the purpose of
increasing the amount of balances needed for clearing purposes; and
(iv) on the date on which the supplemental reserve requirement
is imposed, except as provided in paragraph (11), the total amount
of reserves required pursuant to paragraph (2) is not less than the
amount of reserves that would be required if the initial ratios
specified in paragraph (2) were in effect.
(B) The Board may require the supplemental reserve authorized under
subparagraph (A) only after consultation with the Board of Directors of
the Federal Deposit Insurance Corporation, the Director of the Office of
Thrift Supervision, and the National Credit Union Administration Board.
The Board shall promptly transmit to the Congress a report with respect
to any exercise of its authority to require supplemental reserves under
subparagraph (A) and such report shall state the basis for the
determination to exercise such authority.
(C) The supplemental reserve authorized under subparagraph (A) shall
be maintained by the Federal Reserve banks in an Earnings Participation
Account. Except as provided in subsection (c)(1)(A)(ii) of this section,
such Earnings Participation Account shall receive earnings to be paid by
the Federal Reserve banks during each calendar quarter at a rate not
more than the rate earned on the securities portfolio of the Federal
Reserve System during the previous calendar quarter. The Board may
prescribe rules and regulations concerning the payment of earnings on
Earnings Participation Accounts by Federal Reserve banks under this
paragraph.
(D) If a supplemental reserve under subparagraph (A) has been
required of depository institutions for a period of one year or more,
the Board shall review and determine the need for continued maintenance
of supplemental reserves and shall transmit annual reports to the
Congress regarding the need, if any, for continuing the supplemental
reserve.
(E) Any supplemental reserve imposed under subparagraph (A) shall
terminate at the close of the first 90-day period after such requirement
is imposed during which the average amount of reserves required under
paragraph (2) are less than the amount of reserves which would be
required during such period if the initial ratios specified in paragraph
(2) were in effect.
(5) Foreign branches, subsidiaries, and international banking
facilities of nonmember depository institutions shall maintain reserves
to the same extent required by the Board of foreign branches,
subsidiaries, and international banking facilities of member banks. In
addition to any reserves otherwise required to be maintained pursuant to
this subsection, any depository institution shall maintain reserves in
such ratios as the Board may prescribe against--
(A) net balances owed by domestic offices of such depository
institution in the United States to its directly related foreign
offices and to foreign offices of nonrelated depository
institutions;
(B) loans to United States residents made by overseas offices of
such depository institution if such depository institution has one
or more offices in the United States; and
(C) assets (including participations) held by foreign offices of
a depository institution in the United States which were acquired
from its domestic offices.
(6) The requirements imposed under paragraph (2) shall not apply to
deposits payable only outside the States of the United States and the
District of Columbia, except that nothing in this subsection limits the
authority of the Board to impose conditions and requirements on member
banks under section 25 of this Act [12 U.S.C. 601 et seq.] or the
authority of the Board under section 3105 of this title.
(7) Any depository institution in which transaction accounts or
nonpersonal time deposits are held shall be entitled to the same
discount and borrowing privileges as member banks. In the administration
of discount and borrowing privileges, the Board and the Federal Reserve
banks shall take into consideration the special needs of savings and
other depository institutions for access to discount and borrowing
facilities consistent with their long-term asset portfolios and the
sensitivity of such institutions to trends in the national money
markets.
(8)(A) Any depository institution required to maintain reserves
under this subsection which was engaged in business on July 1, 1979, but
was not a member of the Federal Reserve System on or after that date,
shall maintain reserves against its deposits during the first twelve-
month period following the effective date of this paragraph in amounts
equal to one-eighth of those otherwise required by this subsection,
during the second such twelve-month period in amounts equal to one-
fourth of those otherwise required, during the third such twelve-month
period in amounts equal to three-eighths of those otherwise required,
during the fourth twelve-month period in amounts equal to one-half of
those otherwise required, and during the fifth twelve-month period in
amounts equal to five-eighths of those otherwise required, during the
sixth twelve-month period in amounts equal to three-fourths of those
otherwise required, and during the seventh twelve-month period in
amounts equal to seven-eighths of those otherwise required. This
subparagraph does not apply to any category of deposits or accounts
which are first authorized pursuant to Federal law in any State after
April 1, 1980.
(B) With respect to any bank which was a member of the Federal
Reserve System during the entire period beginning on July 1, 1979, and
ending on the effective date of the Monetary Control Act of 1980, the
amount of required reserves imposed pursuant to this subsection on and
after the effective date of such Act that exceeds the amount of reserves
which would have been required of such bank if the reserve ratios in
effect during the reserve computation period immediately preceding such
effective date were applied may, at the discretion of the Board and in
accordance with such rules and regulations as it may adopt, be reduced
by 75 per centum during the first year which begins after such effective
date, 50 per centum during the second year, and 25 per centum during the
third year.
(C)(i) With respect to any bank which is a member of the Federal
Reserve System on the effective date of the Monetary Control Act of
1980, the amount of reserves which would have been required of such bank
if the reserve ratios in effect during the reserve computation period
immediately preceding such effective date were applied that exceeds the
amount of required reserves imposed pursuant to this subsection shall,
in accordance with such rules and regulations as the Board may adopt, be
reduced by 25 per centum during the first year which begins after such
effective date, 50 per centum during the second year, and 75 per centum
during the third year.
(ii) If a bank becomes a member bank during the four-year period
beginning on the effective date of the Monetary Control Act of 1980, and
if the amount of reserves which would have been required of such bank
determined as if the reserve ratios in effect during the reserve
computation period immediately preceding such effective date were
applied, and as if such bank had been a member during such period,
exceeds the amount of reserves required pursuant to this subsection, the
amount of reserves required to be maintained by such bank beginning on
the date on which such bank becomes a member of the Federal Reserve
System shall be the amount of reserves which would have been required of
such bank if it had been a member on the day before such effective date,
except that the amount of such excess shall, in accordance with such
rules and regulations as the Board may adopt, be reduced by 25 per
centum during the first year which begins after such effective date, 50
per centum during the second year, and 75 per centum during the third
year.
(D)(i) Any bank which was a member bank on July 1, 1979, and which
withdrew from membership in the Federal Reserve System during the period
beginning July 1, 1979, and ending on March 31, 1980, shall maintain
reserves during the first twelve-month period beginning on October 15,
1982, in amounts equal to one-half of those otherwise required by this
subsection, during the second such twelve-month period in amounts equal
to two-thirds of those otherwise required, and during the third such
twelve-month period in amounts equal to five-sixths of those otherwise
required.
(ii) Any bank which withdraws from membership in the Federal Reserve
System after March 31, 1980, shall maintain reserves in the same amount
as member banks are required to maintain under this subsection, pursuant
to subparagraphs (B) and (C)(i).
(E) This subparagraph applies to any depository institution that, on
August 1, 1978, (i) was engaged in business as a depository institution
in a State outside the continental limits of the United States, and (ii)
was not a member of the Federal Reserve System at any time on or after
such date. Such a depository institution shall not be required to
maintain reserves against its deposits held or maintained at its offices
located in a State outside the continental limits of the United States
until the first day of the sixth calendar year which begins after the
effective date of the Monetary Control Act of 1980. Such a depository
institution shall maintain reserves against such deposits during the
sixth calendar year which begins after such effective date in an amount
equal to one-eighth of that otherwise required by paragraph (2), during
the seventh such year in an amount equal to one-fourth of that otherwise
required, during the eighth such year in an amount equal to three-
eighths of that otherwise required, during the ninth such year in an
amount equal to one-half of that otherwise required, during the tenth
such year in an amount equal to five-eighths of that otherwise required,
during the eleventh such year in an amount equal to three-fourths of
that otherwise required, and during the twelfth such year in an amount
equal to seven-eighths of that otherwise required.
(9) This subsection shall not apply with respect to any financial
institution which--
(A) is organized solely to do business with other financial
institutions;
(B) is owned primarily by the financial institutions with which
it does business; and
(C) does not do business with the general public.
(10) In individual cases, where a Federal supervisory authority
waives a liquidity requirement, or waives the penalty for failing to
satisfy a liquidity requirement, the Board shall waive the reserve
requirement, or waive the penalty for failing to satisfy a reserve
requirement, imposed pursuant to this subsection for the depository
institution involved when requested by the Federal supervisory authority
involved.
(11)(A)(i) Notwithstanding the reserve requirement ratios
established under paragraphs (2) and (5) of this subsection, a reserve
ratio of zero per centum shall apply to any combination of reservable
liabilities, which do not exceed $2,000,000 (as adjusted under
subparagraph (B)), of each depository institution.
(ii) Each depository institution may designate, in accordance with
such rules and regulations as the Board shall prescribe, the types and
amounts of reservable liabilities to which the reserve ratio of zero per
centum shall apply, except that transaction accounts which are
designated to be subject to a reserve ratio of zero per centum shall be
accounts which would otherwise be subject to a reserve ratio of 3 per
centum under paragraph (2).
(iii) The Board shall minimize the reporting necessary to determine
whether depository institutions have total reservable liabilities of
less than $2,000,000 (as adjusted under subparagraph (B)). Consistent
with the Board's responsibility to monitor and control monetary and
credit aggregates, depository institutions which have reserve
requirements under this subsection equal to zero per centum shall be
subject to less overall reporting requirements than depository
institutions which have a reserve requirement under this subsection that
exceeds zero per centum.
(B)(i) Beginning in 1982, not later than December 31 of each year,
the Board shall issue a regulation increasing for the next succeeding
calendar year the dollar amount specified in subparagraph (A), as
previously adjusted under this subparagraph, by an amount obtained by
multiplying such dollar amount by 80 per centum of the percentage
increase in the total reservable liabilities of all depository
institutions.
(ii) The increase in total reservable liabilities shall be
determined by subtracting the amount of total reservable liabilities on
June 30 of the preceding calendar year from the amount of total
reservable liabilities on June 30 of the calendar year involved. In the
case of any such twelve-month period in which there has been a decrease
in the total reservable liabilities of all depository institutions, no
adjustment shall be made. A decrease in total reservable liabilities
shall be determined by subtracting the amount of total reservable
liabilities on June 30 of the calendar year involved from the amount of
total reservable liabilities on June 30 of the previous calendar year.
(c) Promulgation of rules and regulations respecting maintenance of
balances
(1) Reserves held by a depository institution to meet the
requirements imposed pursuant to subsection (b) of this section shall,
subject to such rules and regulations as the Board shall prescribe, be
in the form of--
(A) balances maintained for such purposes by such depository
institution in the Federal Reserve bank of which it is a member or
at which it maintains an account, except that (i) the Board may, by
regulation or order, permit depository institutions to maintain all
or a portion of their required reserves in the form of vault cash,
except that any portion so permitted shall be identical for all
depository institutions, and (ii) vault cash may be used to satisfy
any supplemental reserve requirement imposed pursuant to subsection
(b)(4) of this section, except that all such vault cash shall be
excluded from any computation of earnings pursuant to subsection
(b)(4)(C) of this section; and
(B) balances maintained by a depository institution which is not
a member bank in a depository institution which maintains required
reserve balances at a Federal Reserve bank, in a Federal Home Loan
Bank, or in the National Credit Union Administration Central
Liquidity Facility, if such depository institution, Federal Home
Loan Bank, or National Credit Union Administration Central Liquidity
Facility maintains such funds in the form of balances in a Federal
Reserve bank of which it is a member or at which it maintains an
account. Balances received by a depository institution from a second
depository institution and used to satisfy the reserve requirement
imposed on such second depository institution by this section shall
not be subject to the reserve requirements of this section imposed
on such first depository institution, and shall not be subject to
assessments or reserves imposed on such first depository institution
pursuant to section 7 of the Federal Deposit Insurance Act (12
U.S.C. 1817), section 404 of the National Housing Act (12 U.S.C.
1727),\1\ or section 202 of the Federal Credit Union Act (12 U.S.C.
1782).
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\1\ See References in Text note below.
(2) The balances maintained to meet the reserve requirements of
subsection (b) of this section by a depository institution in a Federal
Reserve bank or passed through a Federal Home Loan Bank or the National
Credit Union Administration Central Liquidity Facility or another
depository institution to a Federal Reserve bank may be used to satisfy
liquidity requirements which may be imposed under other provisions of
Federal or State law.
(Dec. 23, 1913, ch. 6, Sec. 19(a)-(c), formerly Sec. 19 (pars.), 38
Stat. 270; June 21, 1917, ch. 32, Sec. 10, 40 Stat. 239; Aug. 23, 1935,
ch. 614, title III, Sec. 324(a), 49 Stat. 714; renumbered Sec. 19(a)-(c)
and amended Pub. L. 89-597, Sec. 2(a), Sept. 21, 1966, 80 Stat. 823;
Pub. L. 91-151, title I, Secs. 4(a), 5, Dec. 23, 1969, 83 Stat. 374,
375; Pub. L. 93-501, title I, Sec. 101(a), Oct. 29, 1974, 88 Stat. 1557;
Pub. L. 96-221, title I, Secs. 103, 104(a), Mar. 31, 1980, 94 Stat. 133,
138; Pub. L. 97-35, title III, Sec. 385, Aug. 13, 1981, 95 Stat. 433;
Pub. L. 97-320, title IV, Sec. 411, title VII, Sec. 708, Oct. 15, 1982,
96 Stat. 1520, 1540; Pub. L. 101-73, title VII, Sec. 744(i)(2), (3),
Aug. 9, 1989, 103 Stat. 439.)
References in Text
This section, referred to in subsec. (a), means section 19 of act
Dec. 23, 1913, as amended, which is classified to sections 142, 371a,
371b, 371b-1, 374, 374a, 461, 463 to 466, 505, and 506 of this title.
The Federal Deposit Insurance Act, referred to in subsec.
(b)(1)(A)(vi), is act Sept. 21, 1950, ch. 967, Sec. 2, 64 Stat. 873, as
amended, which is classified generally to chapter 16 (Sec. 1811 et seq.)
of this title. For complete classification of this Act to the Code, see
Short Title note set out under section 1811 of this title and Tables.
Section 25 of this Act, referred to in subsec. (b)(6), means section
25 of act Dec. 23, 1913, ch. 6, 38 Stat. 273, as amended, popularly
known as the Federal Reserve Act. Section 25 is classified to subchapter
I (Sec. 601 et seq.) of chapter 6 of this title.
For the effective date of the Monetary Control Act of 1980, referred
to in subsec. (b)(8), see section 108 of Pub. L. 96-221, set out as an
Effective Date of 1980 Amendment note under section 248 of this title.
Section 404 of the National Housing Act (12 U.S.C. 1727), referred
to in subsec. (c)(1)(B), was repealed by Pub. L. 101-73, title IV,
Sec. 407, Aug. 9, 1989, 103 Stat. 363.
Codification
Section is comprised of subsecs. (a) to (c), formerly first six
pars., of section 19 of act Dec. 23, 1913 (such first, second through
fifth, and sixth pars. formerly classified to sections 461, 462, and
462b of this title, respectively), as redesignated by Pub. L. 89-597.
For credits prior to enactment of Pub. L. 89-597 on Sept. 21, 1966, see
notes set out under sections 462 and 462b of this title.
Amendments
1989--Subsec. (b)(1)(A)(vi). Pub. L. 101-73, Sec. 744(i)(2), amended
cl. (vi) generally. Prior to amendment, cl. (vi) read as follows: ``any
insured institution as defined in section 1724 of this title or any
institution which is eligible to make application to become an insured
institution under section 1726 of this title; and''.
Subsec. (b)(1)(F), (4)(B). Pub. L. 101-73, Sec. 744(i)(3),
substituted ``Director of the Office of Thrift Supervision'' for
``Federal Home Loan Bank Board''.
1982--Subsec. (b)(1)(E), (F). Pub. L. 97-320, Sec. 411(c), added
subpar. (E) and redesignated former subpar. (E) as (F).
Subsec. (b)(4)(A)(iv). Pub. L. 97-320, Sec. 411(b), inserted
``except as provided in paragraph (11)''.
Subsec. (b)(8)(D)(i). Pub. L. 97-320, Sec. 708(1), substituted
provisions relating to reserve requirements for banks which withdraw
from the Federal Reserve System for provision that any bank which was a
member bank on July 1, 1979, and which withdrew from membership in the
Federal Reserve System during the period beginning on July 1, 1979, and
ending on the day before March 31, 1980, would maintain reserves
beginning on March 31, 1980, in an amount equal to the amount of
reserves it would have been required to maintain if it had been a member
bank on March 31, 1980, and that after March 31, 1980, any such bank was
directed to maintain reserves in the same amounts as member banks were
required to maintain under this subsection, pursuant to subparagraphs
(B) and (C)(i).
Subsec. (b)(8)(D)(ii). Pub. L. 97-320, Sec. 708(2), struck out ``on
or'' after ``Reserve System''.
Subsec. (b)(11). Pub. L. 97-320, Sec. 411(a), added par. (11).
1981--Subsec. (b)(8)(E). Pub. L. 97-35 substituted provisions
relating to applicability to any depository institution that was on Aug.
1, 1978, engaged in such business in a State outside the continental
limits and was not a member of the Federal Reserve System at any time on
or after such date, for provisions relating to applicability to any
depository institution that was on Aug. 1, 1978, engaged in such
business under the laws of a State, was not a member of the Federal
Reserve System on that date, and the principal office of which was
outside the continental limits on that date and has remained outside
ever since.
1980--Subsec. (b). Pub. L. 96-221, Sec. 103, substituted provisions
setting forth additional definitions applicable to reserve requirements
and requirements respecting amounts of reserves maintained against
transaction accounts, waiver of ratio limits in extraordinary
circumstances, supplemental reserves, reserves related to foreign
obligations or assets, exemptions for certain deposits, discounts and
borrowings, transitional adjustments, and additional exemptions and
waivers, for provisions relating to determinations respecting
maintenance of reserves against deposits.
Subsec. (c). Pub. L. 96-221, Sec. 104(a), substituted provisions
relating to the promulgation of rules and regulations respecting
maintenance of balances, for provisions relating to form of reserves
held by member banks.
1974--Subsec. (a). Pub. L. 93-501 substituted ``and, regardless of
the use of the proceeds, shall be deemed a deposit'' for ``shall be
deemed a deposit''.
1969--Subsec. (a). Pub. L. 91-151, Sec. 4(a), authorized Board to
determine type of obligations that would be deemed deposits.
Subsec. (b). Pub. L. 91-151, Sec. 5, authorized Board to prescribe
ratio of indebtedness of member banks to foreign banks, up to a maximum
of 22 percent.
1966--Pub. L. 89-597 designated first par. provisions of section 19
of act Dec. 23, 1913, as subsec. (a), substituted a general provision
authorizing Board to define terms used in sections 142, 371a, 371b, 374,
374a, and 463 to 466 of this title for former provisions defining terms
``demand deposits'', ``gross demand deposits'', ``deposits payable on
demand'', ``time deposits'', ``savings deposits'', and ``trust funds'',
struck out inclusion of ``savings deposits'' in term ``time deposits''
in regard to reserve requirements of member banks, and added subsecs.
(b) and (c) to such section 19, superseding second through sixth pars.,
which authorized Board to fix reserve requirements against time deposits
between the limits of 3 and 10 percent, in lieu of prior limits of 3 and
6 percent, and struck out provision for modification of reserve
requirements to prevent injurious credit to expansion or contraction.
1935--Act Aug. 23, 1935, abrogated statutory construction of demand
deposits.
Effective Date of 1980 Amendment
Amendment by Pub. L. 96-221 effective on first day of sixth month
which begins after Mar. 31, 1980, except that the amendments regarding
subsec. (b)(7) and (8)(D) effective on Mar. 31, 1980, see section 108 of
Pub. L. 96-221, set out as a note under section 248 of this title.
Effective Date of 1974 Amendment
Section 101(b) of Pub. L. 93-501 provided that: ``The amendment made
by subsection (a) [amending this section] shall not apply to any bank
holding company which has filed prior to the date of enactment of this
Act [Oct. 29, 1974], an irrevocable declaration with the Board of
Governors of the Federal Reserve System to divest itself of all of its
banks under section 4 of the Bank Holding Company Act [12 U.S.C. 1843],
or to any debt obligation which is an exempted security under section
3(a)(3) of the Securities Act of 1933 [15 U.S.C. 77c(a)(3)].''
Effective and Termination Dates of 1966 Amendment
Section 7 of Pub. L. 89-597, as amended by Pub. L. 90-87, Sept. 21,
1967, 81 Stat. 226; Pub. L. 90-505, Sec. 1, Sept. 21, 1968, 82 Stat.
856; Pub. L. 91-71, Sept. 22, 1969, 83 Stat. 115; Pub. L. 91-151, title
I, Sec. 1, Dec. 23, 1969, 83 Stat. 371; Pub. L. 92-8, Sec. 1, Mar. 31,
1971, 85 Stat. 13; Pub. L. 92-15, Sec. 1, May 18, 1971, 85 Stat. 38;
Pub. L. 93-63, July 6, 1973, 87 Stat. 147; Pub. L. 93-100, Sec. 1, Aug.
16, 1973, 87 Stat. 342; Pub. L. 93-495, title I, Sec. 107, Oct. 28,
1974, 88 Stat. 1505; Pub. L. 94-200, title I, Sec. 101, Dec. 31, 1975,
89 Stat. 1124; Pub. L. 95-22, title I, Sec. 101, Apr. 19, 1977, 91 Stat.
49; Pub. L. 95-188, title I, Sec. 101, Nov. 16, 1977, 91 Stat. 1387;
Pub. L. 95-630, title XVI, Sec. 1601, Nov. 10, 1978, 92 Stat. 3713,
which provided effective and termination dates for 1966 amendments by
Pub. L. 89-597 (affecting sections 371b, 1425b, and 1828(g) of this
title), was repealed by section 207(a) of Pub. L. 96-221.
Elimination or Reduction of Interest Rate Differential Between Savings
Banks and Savings and Loan, Building and Loan, or Homestead Associations
Pub. L. 94-200, title I, Sec. 102, Dec. 31, 1975, 89 Stat. 1124, as
amended by Pub. L. 95-630, title XVI, Sec. 1602, Nov. 10, 1978, 92 Stat.
3713, which had provided that an interest rate differential for any
category of deposits or accounts which was in effect on December 10,
1975, between (1) any bank (other than a savings bank) the deposits of
which were insured by the Federal Deposit Insurance Corporation and (2)
any savings and loan, building and loan, or homestead association
(including cooperative banks) the deposits or accounts of which were
insured by the Federal Savings and Loan Insurance Corporation or any
mutual savings bank as defined in section 3(f) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(j)) [section 1813(f) of this title] could
not be eliminated or reduced unless (A) written notification was given
by the Board of Governors of the Federal Reserve System to the Congress;
and (B) the House of Representatives and the Senate approved, by
concurrent resolution, the proposed elimination or reduction of the
interest rate differential, was repealed by Pub. L. 97-320, title III,
Sec. 326(a), Oct. 15, 1982, 96 Stat. 1500. See section 326(b)-(d) of
Pub. L. 97-320, set out as a note under section 1828 of this title. See,
also, section 207(b)(1) of Pub. L. 96-221 providing for repeal of
section 102 of Pub. L. 94-200 effective 6 years after Mar. 31, 1980.
Interest Rates: Controls
Section 1 of Pub. L. 89-597 provided that: ``The Secretary of the
Treasury, the Board of Governors of the Federal Reserve System, the
Board of Directors of the Federal Deposit Insurance Corporation, and the
Federal Home Loan Bank Board, in implementation of their respective
powers under existing law and this Act [enacting section 1425b of this
title, amending this section, sections 355, 371b, and 1828 of this
title, and section 771 of former Title 31, Money and Finance, repealing
section 462a-1 of this title and enacting provisions set out as notes
under this section], shall take action to bring about the reduction of
interest rates to the maximum extent feasible in the light of prevailing
money market and general economic conditions.''
Effective and termination dates of control of interest rates
provisions, see Effective and Termination Dates of 1966 Amendment note
above.
Outstanding Rate Regulations
Section 5 of Pub. L. 89-597 provided that: ``Any regulation
prescribed by the Board of Governors of the Federal Reserve System or
the Board of Directors of the Federal Deposit Insurance Corporation with
respect to the payment of deposits and interest thereon by member banks
or insured nonmember banks which is in effect when this Act is enacted
[Sept. 21, 1966] shall continue in effect unless and until it is
modified or rescinded after consultation with the Board of Directors or
the Board of Governors, as the case may be, and the Federal Home Loan
Bank Board.''
Effective and termination dates of existing rate regulations, see
Effective and Termination Dates of 1966 Amendment note under this
section.
Section Referred to in Other Sections
This section is referred to in sections 248, 248a, 1424, 1759, 1823,
1828, 1831r-1, 1831t, 1834, 1841, 3105, 3503, 4001, 4005, 4308, 4309,
4311, 4313, 4402, 4909 of this title; title 15 section 6827; title 31
sections 3121, 5313, 5318A, 5325, 5330, 9110.
