Page:Banking Act of 1933 (Federal Reserve Circular 1248).djvu/43

 that they are solvent by the State banking authorities and upon examination and approval by the Corporation.

Deposits are insured in the amount of $2,500 of the net claim of any depositor, and when a bank (member of the fund) is closed, deposits in this amount are paid in accordance with the procedure established under the permanent insurance provisions of the Act.

Each bank participating in the fund is required to pay to the corporation one half of one per cent of the amount of its deposits eligible for insurance. One half of this amount must be paid at the time of admission to the fund and the remainder is subject to call. One additional assessment, not exceeding the amount theretofore paid to the Corporation, may be made against the members of the fund. The Corporation is to refund to participating banks any balance remaining on July 1, 1934, after providing for all liabilities of the fund.

Permanent plan for insurance of deposits.

This plan becomes effective July 1, 1934, unless the President fixes an earlier date, and applies to the deposits of all member banks as to which the Federal Reserve Board or the Comptroller of the Currency shall certify as hereinafter provided, and until July 1, 1936, to deposits of nonmember banks which are members of the temporary insurance fund. After the latter date, the insurance benefits apply only to member banks of the Federal Reserve System.

Management.

The management of the Corporation consists of a board of directors of three members: The Comptroller of the Currency and two members appointed by the President with the advice and consent of the Senate. One of the appointive members shall be chairman and not more than two members may be from the same political party. The appointive members hold office for a term of six years and receive a salary of $10,000 per annum payable out of the funds of the corporation.

Capital stock.

An appropriation of $150,000,000 from the Federal Treasury is authorized for subscription to the stock of the Corporation on behalf of the United States. Payment on such stock is subject to call by the board of directors. Such stock is to receive dividends to the same extent as stock held by member and nonmember banks.

Class A stock is to be held by member banks and nonmember banks and is entitled to payment of cumulative dividends at the rate of 6 per cent per annum or to the extent of 30 per cent of annual net earnings, whichever may be greater. Class B stock is held by Federal reserve banks and is not entitled to dividends.

Each Federal reserve bank shall subscribe to Class B stock in an amount equal to one- half of its surplus on January 1, 1933, and shall pay in one-half of such subscription, the remainder to be subject to call.

Every member bank is required to subscribe to Class A stock in an amount equal to one- half of one per cent of its total deposit liabilities except that the stock subscription of a member bank hereafter organized shall for the first year of its existence be in an amount equal to 5 per cent of its paid-up capital and surplus. One-half of the subscription must be paid in and the remainder is subject to call.

Provision is made for the adjustment of Class A stock from time to time in the case of increases or decreases in the deposit liabilities of member banks and in the case of insolvency or termination of membership of the member bank.

Whenever the net debit balance of the deposit insurance account of the Corporation shall equal or exceed one-fourth of one per cent of the total deposit liabilities of all Class A stock-holders, the Corporation shall levy an additional assessment upon them equal to one-fourth of one per cent of such liabilities.

What Banks may obtain benefit of Insurance Plan.

Unless the Federal Reserve Board, in the case of a State member bank, and the Comptroller of the Currency, in the case of a national bank, shall certify on the basis of an examination thereof that the assets of such bank are adequate to enable it to meet all of its liabilities