Page:Banking Act of 1933 (Federal Reserve Circular 1248).djvu/46

 transactions by Federal reserve hanks with foreign hankers shall he subject to special supervision and regulation by the Federal Reserve Board; that negotiations with foreign hankers shall not be conducted without the permission of the Board; that the Board may be represented in any such negotiations; and that a full report of all such negotiations shall be made to the Board in writing.

SECTION 11(a) Member banks as mediums in making loans on collateral.

Section 19 of the Federal Reserve Act is amended so as to forbid a member bank to act as the medium or agent of any nonbanking corporation, partnership or individual in making loans on the security of stocks, bonds and other investment securities to brokers or dealers in such securities, and a fine is provided for violation.

SECTION 11(b) Interest on deposits of member banks.

Section 19 of the Federal Reserve Act is amended so as to provide that no member bank shall pay interest on any demand deposit, except in accordance with existing contracts; but this provision does not apply to a deposit which is payable only at an office of the bank located in a foreign country and does not apply to a deposit made by a mutual savings bank nor to a deposit of public funds made by any State, county, municipality or school district or other subdivision, with respect to which payment of interest is required under State law.

The Federal Reserve Board may regulate the amount of interest to be paid on time deposits.

No member bank shall pay any time deposit before its maturity, or waive a requirement of notice before payment of a savings deposit except when such requirement is waived as to all savings deposits subject thereto.

SECTION 11(c) Withdrawal of Postal Savings Deposits.

The Act of June 25, 1910, providing for postal savings deposits, is amended to provide that any such deposits may be withdrawn with accrued interest only on 60 days notice. However, such funds may be withdrawn on demand if no interest is paid which accrues after the date of enactment of the Act. Postal savings depositories may make time deposits in member banks under regulations prescribed by the Postmaster General.

SECTION 11(d) Security for Deposits of Postal Savings Funds.

The Postal Savings Act of June 25, 1910, is amended to provide that no security shall be required for deposits of postal savings funds in banks or trust companies as to such part of such deposits as are insured under the provisions contained in this Act for insurance of bank deposits.

SECTION 12 Loans by Member Banks to Executive Officers.

Section 22 of the Federal Reserve Act is amended so as to forbid a member bank to loan to its executive officers and to forbid them to borrow from the bank; but loans of this kind heretofore made may be renewed or extended not more than two years from the date this provision takes effect. An executive officer of a bank who borrows from any other bank is also required to make a written report thereof to the chairman of the board of directors of his bank. Violation of this provision is made a crime, subject to fine or imprisonment.

SECTION 13 Loans to or investments in stock of affiliates.

A new section 23A is added to the Federal Reserve Act which provides that no member bank shall make any loan or extension of credit, to, or purchase securities under repurchase