Sec. 9. Any bank incorporated by special law of any State, or ogan-ized under the general laws of any State or of the U. S., desiring to become a member of the Fed. Res. System, may make application to the Fed. Res. Board, under such rules and regulations as it may prescribe, for the right to subscribe to the stock of the Fed. Res. bank organized within the Dist. in which the applying bank is located. Such application shall be for the same amount of stock that the applying bank would be required to subscribe to as a Nat. bank. The Fed. Res. Board, subject to such conditions as it may prescribe, may permit the applying bank to become a stockholder of such Fed. Res. bank.
In acting upon such applications the Fed. Res. Board shall consider the financial condition of the applying bank, the general character of its management, and whether or not the corporate powers exercised are consistent with the purposes of this Act.
Whenever the Fed. Res. Board shall permit the applying bank to become a stockholder in the Fed. Res. bank of the Dist. its stock subscription shall be payable on call of the Fed. Res. Board, and stock issued to it shall be held subject to the provisions of this Act.
All banks admitted to membership under authority of this Sec. shall be required to comply with the reserve and capital requirements of this Act and to conform to those provisions of law imposed on Nat. banks which prohibit such banks from lending on or purchasing their own stock, which relate to the withdrawal or impairment of their capital stock, and which relate to the payment of unearned Divs. Such banks and the officers, agents, and employees thereof shall also be subject to the provisions of and to the penalties prescribed by Sec. 5209 of the Rev. Sts., and shall be required to make reports of condition and of the payment of Divs. to the Fed. Res. bank of which they become a member. Not less than 3 of such reports shall be made annually on call of the Fed. Res. bank on dates to be fixed by the Fed. Res. Board. Failure to make such reports within 10 days after the date they are called for shall subject the offending bank to a penalty of $100 a day for each day that it fails to transmit such report; such penalty to be collected by the Fed. Res. bank by suit or otherwise.
As a condition of membership such banks shall likewise be subject to examinations made by direction of the Fed. Res. Board or of the Fed. Res. bank by examiners selected or approved by the Fed. Res. Board.
Whenever the directors of the Fed. Res. bank shall approve the examinations made by the State authorities, such examinations and the reports thereof may be accepted in lieu of examinations made by examiners selected or approved by the Fed. Res. Board: Provided, however, That when it deems it necessary the board may order special examinafederal Reserve Act tions by examiners of its own selection and shall in all cases approve the form of the report. The expenses of all examinations, other than those made by State authorities, shall be assessed against and paid by the banks examined.
If at any time it shall appear to the Fed-. Res. Board that a member bank has failed to comply with the provisions of this Sec. or the regulations of the Fed. Res. Board made pursuant thereto, it shall be within the power of the board after hearing to require such bank to surrender its stock in the Fed. Res. bank and to forfeit all rights and privileges of membership. The Fed. Res. Board may restore membership upon due proof of compliance with the conditions imposed by this Sec.
Any State bank or Tr. Co. desiring to withdraw from membership in a Fed. Res. bank may do so, after 6 months' written notice shall have been filed with the Fed. Res. Board, upon the surrender and cancellation of all of its holdings of capital stock in the Fed. Res. bank: Provided, however, That no Fed. Res. bank shall, except under express authority of the Fed. Res. Board, cancel within the same calendar year more than 25% of its capital stock for the purpose of effecting voluntary withdrawals during that year. All such applications shall be dealt with in the order in which they are filed with the board. Whenever a member bank shall surrender its stock holdings in a Fed. Res. bank, or shall be ordered to do so by the Fed. Res. Board, under authority of law, all of its rights and privileges as a member bank shall thereupon cease and determine, and after due provision has been made for any debt due or to become due to the Fed. Res. bank it shall be entitled to a refund of its cash-paid subscription with Int. at the rate of \ of 1% per month from date of last Div., if earned, the amount refunded in no event to exceed the book value of the stock at that time, and shall likewise be entitled to repayment of deposits and of any other balance due from the Fed. Res. bank.
No applying bank shall be admitted to membership in a Fed. Res. bank unless it possesses a paid-up, unimpaired capital sufficient to entitle it to become a Nat. B'k'g. Asso. in the place where it is situated under the provisions of the Nat .-bank Act.
Banks becoming members of the Fed. Res. System under authority of this Sec. shall be subject to the provisions of this Sec. and to those of this Act which relate specifically to member banks, but shall not be subject to examination under the provisions of the first 2 paragraphs of Sec. 5240 of the Rev. Sts. as amended by Sec. 21 of this Act. Subject to the provisions of this Act and to the regulations of the board made pursuant thereto, any bank becoming a member of the Fed. Res. System shall retain its full charter and statutory rights as a State bank or Tr. Co., and may continue to exercise all corporate powers granted it by the State in which it was created, and shall be entitled to all privileges of member banks: Provided, however, That no Fed. Res. bank shall be permitted to discount for any State bank or Tr. Co. notes, drafts, or bills of exchange of any one borrower who is liable for borrowed money to such State bank or Tr. Co. in an amount greater than 10% of the capital and surplus of such State bank or Tr. Co., but the discount of bills of exchange drawn against actually existing value and the discount of commercial or business paper actually owned by the person negotiating the same shall not be considered as borrowed money within the meaning of this Sec. The Fed. Res. bank, as a condition of the discount* of notes, drafts, and bills of exchange for such State bank or Tr. Co., shall require a C't'f. or guaranty to the effect that the borrower is not liable to such bank in excess of the amount provided by this Sec., and will not be permitted to become liable in excess of this amount while such notes, drafts, or bills of exchange are under discount with the Fed. Res. bank.
It shall be unlawful for any officer, clerk, or agent of any bank admitted to membership under authority of this Sec. to certify any check drawn upon such bank unless the person or Co. drawing the check has on deposit therewith at the time such check is certified an amount of money equal to the amount specified in such check. Any check so certified by duly authorized officers shall be a good and valid obligation against such bank, but the act of any such officer, clerk, or agent in violation of this Sec. may subject such bank to a forfeiture of its membership in the Fed. Res. System upon hearing by the Fed. Res. Board.