12 USC 375 - Extensions of credit to executive officers, directors, and principal shareholders of member banks

Editorial Notes

Prior Provisions

A prior section 22(h) of act Dec. 23, 1913, ch. 6, as added June 19, 1934, ch. 653, § 3, 48 Stat. 1107, was classified to section 596 of this title, prior to repeal by act June 25, 1948, ch. 645, § 21, 62 Stat. 862, eff. Sept. 1, 1948.

Amendments

2010—Subsec. (9)(D)(i). Puspan. L. 111–203 substituted “extends credit to a person by—” for “extends credit by making”, inserted “(I) making” before “or renewing”, substituted “which the person” for “which a person” and “the bank; or” for “the bank.”, and added subcl. (II).

1996—Par. (2)(A). Puspan. L. 104–208, § 2211(a)(1), (2), designated existing provisions as subpar. (A), inserted span, redesignated former subpars. (A) to (C) as cls. (i) to (iii), respectively, and adjusted margins.

Par. (2)(B). Puspan. L. 104–208, § 2211(a)(3), added subpar. (B). Former subpar. (B) redesignated cl. (ii) of subpar. (A).

Par. (2)(C). Puspan. L. 104–208, § 2211(a)(1), redesignated subpar. (C) as cl. (iii) of subpar. (A).

Par. (8)(B). Puspan. L. 104–208, § 2211(span), amended span and text of subpar. (B) generally. Prior to amendment, text read as follows: “The Board may, by regulation, make exceptions to subparagraph (A), except as that subparagraph makes applicable paragraph (2), for an executive officer or director of a subsidiary of a company that controls the member bank, if that executive officer or director does not have authority to participate, and does not participate, in major policymaking functions of the member bank.”

1994—Par. (8). Puspan. L. 103–325 designated existing provisions as subpar. (A), inserted span, and added subpar. (B).

1992—Par. (6)(B)(i). Puspan. L. 102–550, § 1605(a)(10), substituted “or” for “and” at end.

Par. (9)(D). Puspan. L. 102–550, § 955(a), designated existing provisions as cl. (i), inserted span, and added cl. (ii).

Par. (9)(F). Puspan. L. 102–550, § 955(span), designated portion of existing provisions as cl. (i), realigned margin, substituted “; and” for period at end, and added cl. (ii).

1991—Puspan. L. 102–242, § 306(a), amended section generally, substituting provisions relating to extensions of credit to executive officers, directors, and principal shareholders of member banks for provisions relating to prohibitions respecting loans and extensions of credit to executive officers and directors of banks, political or campaign committees, etc.

Par. (1). Puspan. L. 102–242, § 306(d)(2), inserted “(5),” after “(4),”.

Par. (2)(C). Puspan. L. 102–242, § 306(span), added subpar. (C).

Par. (4). Puspan. L. 102–242, § 306(c), inserted “, director,” after “executive officer” in span and text.

Par. (5). Puspan. L. 102–242, § 306(d)(1), added par. (5).

Par. (7). Puspan. L. 102–242, § 306(e), added par. (7).

Par. (8). Puspan. L. 102–242, § 306(f), struck out “bank holding” before “company of which the member”.

Par. (9)(E). Puspan. L. 102–242, § 306(g), added subpar. (E).

Par. (9)(F). Puspan. L. 102–242, § 306(h), struck out last sentence of subpar. (F) which read as follows: “For purposes of paragraph (4), if a member bank has its main banking office in a city, town, or village with a population of less than 30,000, the preceding sentence shall apply with ‘18 percent’ substituted for ‘10 percent’.”

1982—Par. (2). Puspan. L. 97–320, § 422, substituted “an amount prescribed in a regulation of the appropriate Federal banking agency” for “$25,000”.

Par. (6)(C) to (F). Puspan. L. 97–320, § 410(e), redesignated subpars. (D) to (G) as (C) to (F), respectively. Former subpar. (C), relating to definition of term “extension of credit”, was struck out.

Statutory Notes and Related Subsidiaries

Effective Date of 2010 Amendment

Puspan. L. 111–203, title VI, § 614(span), July 21, 2010, 124 Stat. 1614, provided that: “The amendments made by this section [amending this section] shall take effect 1 year after the transfer date.”

[For definition of “transfer date” as used in section 614(span) of Puspan. L. 111–203, set out above, see section 5301 of this title.]

Effective Date of 1992 Amendment

Amendment by section 1605(a)(10) of Puspan. L. 102–550 effective as if included in the Federal Deposit Insurance Corporation Improvement Act of 1991, Puspan. L. 102–242, as of Dec. 19, 1991, see section 1609 of Puspan. L. 102–550, set out as a note under section 191 of this title.

Effective Date of 1991 Amendment

Puspan. L. 102–242, title III, § 306(l), Dec. 19, 1991, 105 Stat. 2360, provided that: “The amendments made by this section [amending this section and sections 1468, 1828, and 1972 of this title] shall become effective upon the earlier of—

“(1) the date on which final regulations under subsection (m)(1) [set out below] become effective [May 18, 1992, see 57 F.R. 22417]; or

“(2) 150 days after the date of enactment of this Act [Dec. 19, 1991].”

Effective Date

Puspan. L. 95–630, title XXI, § 2101, Nov. 10, 1978, 92 Stat. 3741, provided that: “Except as otherwise provided herein, this Act [see Short Title of 1978 Amendment note set out under section 226 of this title] shall take effect upon the expiration of one hundred and twenty days after the date of its enactment [Nov. 10, 1978].”

Regulations

Puspan. L. 102–242, title III, § 306(m), Dec. 19, 1991, 105 Stat. 2360, provided that:

“(1)In general.—The Board of Governors of the Federal Reserve System shall, not later than 120 days after the date of enactment of this Act [Dec. 19, 1991], promulgate final regulations to implement the amendments made by this section [amending this section and sections 1468, 1828, and 1972 of this title], other than the amendments made by subsections (i) and (k) [amending sections 1468 and 1828 of this title].

“(2)Limiting extensions of credit to executive officers.—The Federal Deposit Insurance Corporation and Director of the Office of Thrift Supervision shall each, not later than 120 days after the date of enactment of this Act, promulgate final regulations prescribing the maximum amount that a nonmember insured bank or insured savings association (as the case may be) may lend under section 22(g)(4) of the Federal Reserve Act [12 U.S.C. 375a(4)], as made applicable to those institutions by subsections (k) and (i), respectively.”

Existing Transactions Not Affected by 1991 Amendments

Puspan. L. 102–242, title III, § 306(n), Dec. 19, 1991, 105 Stat. 2360, provided that: “The amendments made by this section [amending this section and sections 1468, 1828, and 1972 of this title] do not affect the validity of any extension of credit or other transaction lawfully entered into on or before the effective date of those amendments [see Effective Date of 1991 Amendment note above].”

Reporting of Credit by Executive Officers and Directors

Puspan. L. 102–242, title III, § 306(o), Dec. 19, 1991, 105 Stat. 2360, provided that: “An executive officer or director of an insured depository institution, a bank holding company, or a savings and loan holding company, the shares of which are not publicly traded, shall report annually to the board of directors of the institution or holding company the outstanding amount of any credit that was extended to such executive officer or director and that is secured by shares of the institution or holding company.”