View PDF

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

FEDERAL RESERVE BANK
OF NEW YORK
Circular No. 1841, April 29, 1938
Reference to Circulars Nos. 1399,
1556, 1582, and
1616

LOANS TO EXECUTIVE OFFICERS OF MEMBER BANKS
(Section 22 (g) of the Federal Reserve Act as Amended April 25, 1938)
To all Member Banks in the
Second Federal Reserve District:

The following bill (S. 3400) passed by both houses of Congress was approved by the
President on April 25, 1938:
Be it enacted by the Senate and House of Representatives of the United States of America
in Congress assembled, That subsection (g) of section 22 of the Federal Reserve Act, as amended
(U. S. C , title 12, sec. 375a), is amended by striking out the word "five" in the first sentence of
such subsection and inserting in lieu thereof the word "six".
The first sentence of subsection (g) of section 22 of the F e d e r a l Reserve Act, as thus
amended, r e a d s as follows:
(g) No executive officer of any member bank shall borrow from or otherwise become indebted to any member bank of which he is an executive officer, and no member bank shall make
any loan or extend credit in any other manner to any of its own executive officers: Provided,
That loans made to any such officer prior to June 16, 1933, may be renewed or extended for
periods expiring not more than six years from such date where the board of directors of the
member bank shall have satisfied themselves that such extension or renewal is in the best interest
of the bank and that the officer indebted has made reasonable effort to reduce his obligation,
these findings to be evidenced by resolution of the board of directors spread upon the minute book
of the bank: Provided further, That with the prior approval of a majority of the entire board of
directors, any member bank may extend credit to any executive officer thereof, and such officer
may become indebted thereto, in an amount not exceeding $2,500.

The text of the remainder of subsection (g) of section 22 will be found in the Appendix to
Regulation 0 of the Board of Governors of the Federal Reserve System, effective January 1,
1936, a copy of which regulation was transmitted to each member bank in the Second Federal
Reserve District accompanying Circular No. 1616, dated December 2, 1935.
This circular is sent to all member banks in the Second Federal Reserve District for their
information.




GEORGE L. HARRISON,

President.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102