Full text of Federal Reserve Bank of New York Circulars : [Mr. Hayes's Letter Transmitting Comptroller of the Currency Regulation Regarding National Bank Loans Secured by Direct Obligations of the United States]

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Federal R

eserve
NEW

Ba n k

YORK

R E C T O R

of

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ew

York

4 5 , N .Y .
2 - 5 7 0 0

December 14, 19^5

To Each State Member Bank in the
Second Federal Reserve District:

Effective November 17, 196 5, the Comptroller of the Currency amended
his regulation on loans made by national banks secured by obligations of the
United States.

The regulation previously permitted such loans to be made by

national banks without limitation only when secured by direct obligations of
the United States.

Loans secured by obligations fully guaranteed both as to

principal and interest by the United States were limited to 25 per cent of a
bank's capital and surplus.

The amendment removes the latter lending limit

requirement, and permits loans secured by obligations fully guaranteed both
as to principal and interest by the United States also to be made without
limitation.
Section ll(m) of the Federal Reserve Act makes the Comptroller's
regulation applicable to State member banks.

We are therefore bringing to

your attention the text of the amendment, printed on the reverse side of
this letter.
November

The amendment was published in the Federal Register of

17, 1965.




ALFRED HAYES
President

(Over)

TITLE 12 - BANKS AND BANKING
CHAPTER I - BUREAU OF THE COMPTROLLER OF THE CURRENCY,
DEPARTMENT OF THE TREASURY
PART 6 - LOANS MADE BY NATIONAL BANKS SECURED BY OBLIGATIONS
OF THE UNITED STATES
[As amended effective November

1J,

1965]

§ 6.1 Scope and application.
(a)

This part is issued by the Comptroller of the Currency with the

approval of the Secretary of the Treasury under authority of paragraph (8) of
section 5200 of the Revised Statutes, as amended (12 U.S.C. 84), and
section 321(b) of the act of August 23, 1935 (49 Stat. 713)j
(b)

This part applies to loans made by National Banks secured by

either direct obligations of the United States or obligations fully guaranteed
both as to principal and interest by the United States.

§ 6.2 General authorization.
The obligations to any national banking association of any person,
copartnership, association, or corporation, secured by not less than a like
amount (at par or face value) of either direct obligations of the United
States or obligations fully guaranteed both as to principal and interest by
the United States, shall not be subject to any limitation based upon the
capital and surplus of the association.