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X-7652 INTERPRETATION OF BANKING- ACT OF 1933. Copies to "be sent to a l l Federal reserve "banks. October 20, 1933. Mr. M. L. McClure, Federal Reserve Agent, Federal Reserve Bank of Kansas City, Kansas City, Missouri. Dear Mr. McClure: Receipt i s acknowledged of your l e t t e r of September 21, 1933, i n which you requested advice as to whether an e x i s t i n g State "bank with a capital of $25,000 which moves i t s l o c a t i o n to another town having a population of 3,000 or l e s s inhabitants w i l l "be e l i g i b l e for admission to membership i n the Federal Reserve System. You c a l l e d a t t e n t i o n to the Board's ruling of July 22, 1933, (X-7521), to the e f f e c t that under the provisions of the Banking Act of 1933 a State bank organized on or a f t e r June 16, 1933, i n a place with a population of 3,000 or l e s s inhabitants with a capital of not l e s s than $25,000 i s e l i g i b l e for admission to membership i n the Federal Reserve System i f i t i s at the time e n t i t l e d to the b e n e f i t s of insurance under Section 12B of the Federal Reserve Act. In the circumstances, you are advised that an e x i s t i n g State bank with a capital of not l e s s than $25,000 and located i n a town of not exceeding 3,000 inhabitants w i l l be e l i g i b l e for admission to membership i n the Federal Reserve System a f t e r i t s removal t o another town having a population of not exceeding 3,000 inhabitants, i f the removal was authorized by and i n accordance with the law of the State, provided, of course, that the bank complies with a l l other requirements for admission to membership. If such a bank should decide to apply f o r membership X-7652 - 2 - i n the System while not e n t i t l e d to the b e n e f i t s of insurance -under Sect i o n 12B of the Federal Reserve Act, i t should arrange to furnish to the Board a copy of an opinion of the Attorney General of the State, or other State authority having j u r i s d i c t i o n of the matter, with respect to the question whether i t was "organized" at the time of removal or at a date prior thereto. In any such case, the Board would also wish to "be f u l l y informed as to the f a c t s regarding the removal with particular reference to the question whether i t was i n contemplation of an application for membership, or for the purpose of evading the requirement that a new State bank situated i n a town of 3,000 inhabitants or l e s s upon becoming a member of the Federal Reserve System must be e n t i t l e d to the b e n e f i t s of insurance at the time of admission to membership unless i t has a capital of at l e a s t $50,000. In connection with the l a s t paragraph of your l e t t e r , the Compt r o l l e r of the Currency has been requested to advise you as to the p o s i t i o n of h i s o f f i c e with regard to the removal of a national bank to another town. Very truly yours, (Signed) Chester Morrill Chester Morrill, Secretary.
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