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Excerpts from Minutes of Conference of Presidents, June 7 and 8, 3.946,

Supervisory policy
Conditions of membership of State member banks
Mr. Young referred to the standard conditions of membership
of State member banks set forth in section 6 of the Board's Regulation H and
to the practice of the Board of imposing special conditions of membership.
He stated that in many cases member banks have been critical of the conditions of membership and he expressed the view that conditions' of ueiriborship
might bo eliminated except in special cases. There was a diversity of opinion among the presidents regarding the desir .biiity of the elimination of the
standard conditions of membership, but general agreement that in the past some
banks have been subjected to special conditions of membership many of :;hich
have little or no meaning at the present time. It v - s the viev; of the Con.a
ference that special conditions of membership of State member banks should be
reviewed for the purpose of eliminating as many of them as possible. It was
suggested that an endeavor should be made in this connection to obtain the
agreement of the member bank to the standard conditions of membership (where
they have not already been imposed) as an incident to the removal of these
special conditions. It was recognised that special conditions are necessary
and desirable in some cases but in general they are of a temporary character.

Meeting between Board and Presidents, June 11
10. Conditions of Membership. The Conference reviev.ed past and
present practices regarding the imposition of special and standard conditions
upon the admission of State banks into membership in the Federal Reserve
System. It was pointed out that in the past some banks have been subjected to
numerous conditions of membership many of which have little or no meaning at
present. It was the view of the Conference that special condition.? of membership of State member banks should be reviewed for the purpose of eliminating
as many of them as possible, and that an endeavor should be made in this connection to obtain the agreement of the member bank to standard conditions of
membership (where they have not been imposed) as an incident to the removal of
these special conditions. It was recognized that special conditions are necessary and desirable in some cases but in general they are of a temporary character.
Chairman Eccles stated that the Board agreed with the views of the
presidents in this matter, that consideration is being given to the uniform conditions to be prescribed for all bunks admitted to membership in the System in
the future, and that the Board would review the special conditions that had been
prescribed in the past ixtji a viei; to their elimination as rapidly as possible
so that in time the conditions of membership for all banks should be uniform.
Mr, Sproul responded that that ras what the presidents had in mind.

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