Full text of Bank Service Company Act

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1132

PUBLIC LAW 87-856-OCT. 23, 1962

[76 STAT.

Public Law 87-856
October 23, 1962
[H. R. 8874]

Bank service
corporations.
Stock ownership.
Definitions.

AN ACT
To authorize certain banks to invest in corporations whose purpose is to provide
clerical services for them, and for other purposes.

Be it enacted hy the Senate and House of Representatives of the
United States of America in Congress assembled,) That for the purposes of this Act—
(a) The term "Federal supervisory agency" means the Comptroller
of the Currency, the Board of Governors of the Federal Reserve System, or the Board of Directors of the Federal Deposit Insurance Corporation.
(b) The term "bank services" means services such as check and
deposit sorting and posting, computation and posting of interest and
other credits and charges, preparation and mailing of checks, statements, notices, and similar items, or any other clerical, bookkeeping,
accounting, statistical, or similar functions performed for a bank.
(c) The term "bank service corporation" means a corporation
organized to perform bank services for two or more banks, each of
which owns part of the capital stock of such corporation, and at least
one of which is subject to examination by a Federal supervisory
agency.
(d) The term "invest" includes any advance of funds to a bank
service corporation, whether by the purchase of stock, the making of a
loan, or otherwise, except a payment for rent earned, goods sold and
delivered, or services rendered prior to the making of such payment.
SEC. 2. (a) No limitation or prohibition otherwise imposed by any
provision of Federal law exclusively relating to banks shall prevent
any two or more banks from investing not more than 10 per centum
of the paid-in and unimpaired capital and unimpaired surplus of
each of them in a bank service corporation.
(b) If stock in a bank service corporation has been held by two
banks, and one of such banks ceases to utilize the services of the corporation and ceases to hold stock in it, and leaves the other as the sole
stockholding bank, the corporation may nevertheless continue to function as such and the other bank may continue to hold stock in it.
SEC. 3. Whenever a bank (referred to in this section as an "applying
bank") subject to examination by a Federal supervisory agency applies
for a type of bank services for itself from a bank service corporation
which supplies the same type of bank services to another bank, and
the applying bank is competitive with any bank (referred to in this
section as a "stockholding bank") which holds stock in such corporation, the corporation must offer to supply such services by either—
(1) issuing stock to the applying bank and furnishing bank
services to it on the same basis as to the other banks holding stock
in the corporation, or
(2) furnishing bank services to the applying bank at rates no
higher than necessary to fairly reflect the cost of such services,
including the reasonable cost of the capital provided to the corporation by its stockholders,
at the corporation's option, unless comparable services at competitive
overall cost are available to the applying bank from another source,
or unless the furnishing of the services sought by the applying bank
would be beyond the practical capacity of the corporation. I n any
action or proceeding to enforce the duty imposed by this section, or for
damages for the breach thereof, the burden shall be upon the bank
service corporation to show such availability.
SEC. 4. No bank service corporation may engage in any activity
other than the performance of bank services for banks.

76 STAT.]

PUBLIC LAW 87-857-OCT. 23, 1962

1133

SEC. 5. (a) No bank subject to examination by a Federal supervisory
agency may cause to be performed, by contract or otherwise, any bank
services for itself, whether on or off its premises, unless assurances
satisfactory to the agency prescribed in subsection (b) of this section
are furnished to such agency by both the bank and the party performing such services that the performance thereof will be subject to regulation and examination by such agency to the same extent as if such
services were being performed by the bank itself on its own premises.
(b) The assurances required by subsection (a) of this section shall
be given, in the case of—
(1) a national banking association or a bank operating under
the code of laws for the District of Columbia, to the Comptroller
of the Currency;
(2) a bank (other than a bank described in paragraph (1))
which is a member of the Federal Keserve System, to the Board
of Governors of the Federal Reserve System; and
(3) a bank (other than a bank described in paragraph (1) or
(2)) whose deposits are insured by the Federal Deposit Insurance
Corporation, to the Board of Directors of the Federal Deposit
Insurance Corporation.
Approved October 23, 1962.

Public Law 87-857
AN ACT
To amend the Policemen and Firemen's Retirement and Disability Act.

Be it enacted hy the Senate aifid House of Representatives of the
United States of America in dongress assembled^ That the Policemen
and Firemen's Retirement and Disability Act, as amended by the Act
approved August 21, 1957 (71 Stat. 394), is amended by designating
subsection (g) as subsection ( g ) ( 1 ) and by inserting the following
paragraph at the end of such subsection:
" (2) I n any case in which the proximate cause of an injury incurred
or disease contracted by a member is doubtful, or is shown to be other
than the performance of duty, and such injury or disease is shown to
have been aggravated by the performance of duty to such an extent
that the member is permanently disabled for the performance of duty,
such disability shall be construed to have been incurred in the performance of duty. The member shall, upon retirement for such disability, receive an annuity computed at the rate of 2 per centum of his
basic salary at the time of his retirement for each year or portion
thereof of his service: Provided^ That such annuity shall not exceed 70
er centum of his basic salary at the time of retirement, nor shall it
e less than 66% per centum of his basic salary at the time of
retirement."
Approved October 23, 1962.

E

October 23, 1962
[H. R. 6836]

D. C. policemen
and firemen.
Disability retirement.
D.C. Code 4527.