Full text of Mimeograph Letters and Statements of the Board : Loans Made by Member Banks on Real Estate Outside Their Districts, Number 147, Volume 1, Page 221

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221
147.

F E D E R A L

R E S E R V E

B O A R D

Washington
February 5, 1915.

My dear Governor*.
In the accompanying letter Mr. McDougal asks
for an expression of opinion on the subject of whether
or not a national bank which is a member of the Federal
Reserve System may make loans on roal estate which is
not situated in the district in which the national bank
is located.
In reply I beg to advise that Section 24 of
the Federal Reserve Act provides in terms that "Any national banking association not situated'
in a central reserve city may make loans secured by
improved and unencumbered farm land, situated with­
in its Federal reserve district .......The Fecleral
Reserve Board shall have power from time to time to
add to the list of cities in which national banks
shall not be permitted to make loans secured upon
real estate in the manner described in this section."
Section 5137 of the Revised Statutes provides
that national banking associations may purchase, hold and
convey roal estate for certain specific purposes and for
no others. The effect of Section 24 of the Federal Reserve
Act is to extend the powers granted by Section 5137 and
since this Act specifically limits loans to those secured
by farm land situated within the district in which tho
bank is located, it is obvious that the Federal Reserve
Board is without power by regulation to vitiate this re­
striction.
Respectfully,
(Signed)

M. 0. ELLIOTT
Counsel.

Hon. Charles S. Hamlin,
Governor.