The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Minutes of actions taken by the Board of Governors of the e der Reserve System on Monday, December 3, 1951. PRESENT: Mr. Mr. Mr. Mr. Mr. Martin, Chairman Szymczak Vardaman Norton Powell Mr. Carpenter, Secretary Mr. Sherman, Assistant Secretary Mr. Kenyon, Assistant Secretary Minutes of actions taken by the Board of Governors of the Federal Reserve System on November 30) 1951, were approved unanimously. Letter to Mr. Latham, Vice President of the Federal Reserve Barik of Boston, reading as follows: "In accordance with the request contained in your letter of November 27, 1951, the Board approves the aPPointment of Charles F. Napoli as an assistant examiner for the Federal Reserve Bank of Boston. Please advise us of the date upon which the appointment becomes ef fective." Approved unanimously. Letter to Mr. Slade, Vice President of the Federal Reserve /3ark of San Francisco, reading as follows: "Reference is made to your letter of November 20, , 1 , 951, submitting the proposal of the Central Valley 'al* of California, Richmond, California, to retire its ?utstanding preferred stock in the amount of $250,000 Tar value $50) through the exchange of 1-1/h shares of eoMmon stock for each share of preferred stock tendered and the retirement of the remaining preferred shares as :nd when additional common stock is sold to net the bank Per share. 12/3/51 -2"In view of your recommendation, the Board of Governors approves the proposed retirement of preferred stock by the Central Valley Bank of California, Richmond, California, in accordance with the plan outlined in your letter, provided the prior approval of the State authorities is obtained." Approved unanimously. Letter to Mr. Wilbur, Chairman of the Federal Reserve Bank o -an Francisco, reading as follows: "In the November 18, 1951, issue of The Ogden §La_aldard thaT---- Examiner, Ogden City, Utah, it is indicated Mr. Frank M. Browning, who is a director of the Salt Lake City Branch, together with others is applying to the State Bank Commissioner to establish the sank of Utah. "As you know-, the Board's regulations relating to -4.he operation of Branches of Federal Reserve Banks Provide that the directors appointed by the Board of C6vernors shall be persons who are not primarily enage in banking and preferably are not directors of anks, although they may be stockholders. While this Provision permits some latitude in the selection of li rectors, it follows the general principle established ln the Federal Reserve Act that some of the directors c)!' the Federal Reserve Banks should not be associated Ith commercial banks. The Board feels that it is in he Public interest to have diversified representation c'n the Boards of Directors of the Branches as well as at the parent Bank, and it has followed the general 1ioY of selecting as its appointees individuals who iiere not officers or directors of commercial banks. n°wever, on a few- occasions in the past, the Board of fvernors interposed no objection to a Branch director, 10 had become a director of a commercial bank, con4&111ing to serve as a director for the remainder of ""e current year. "It appreciated, therefore, if you will develop will be and forward to the Board such information with resPect to the organization of the proposed Bank of Utah 444 Mr. Browning's connection with it as will enable the Z T 1 12, ) ) 4 6 P.s.t Ailt)t) 12/3/51 -3"Board to determine whether, in accordance with the policy set forth above, his services as a Branch director should be terminated. Inasmuch as he has already been appointed a Branch director for a new two-year term beginning January 1, 1952, it would be helpful if the matter could be decided before that date." Approved unanimously. Letter to the Presidents of all Federal Reserve Banks, reading as folloofs: "There have been forwarded to you today under separate cover the indicated number of copies of the following forms, a copy of each of which is attached, for use of State member banks and their affiliates in submitting reports as of the next call date: Number of -412111Form F. R. 105 (Call No. 122), Report of condition of State member banks. Form F. R. 105b (Revised August 1939), Loans and advances to affiliates and investments in and loans secured by obligations of affiliates. Form F. R. 105e (Revised May 19)48), Publisher's copy of report of condition of State member banks. Form F. R. 105e-1 (Revised May 19)48), Publisher's copy of report of condition of State member banks. Form F. R. 220 (Revised August 19)46), Report of affiliate or holding company affiliate. Form F. R. 220a (Revised August 19)46), Publisher's copy of report of affiliate or holding company affiliate. Form F. R. 220b (Revised August 19)46), Instructions for the preparation of reports of affiliates and holding company affiliates. "All of the forms are the same as those used on ctober 10, 1951 except for a breakdown of Schedule A of 2rm F. R. 105, item 6(b), real estate loans secured by t:eeidential properties (other than farm) into sub-items (1) -Lrisured by Federal Housing Administration, (2) Insured or guaranteed by Veterans Administration, (3) Not insured or 2 12/3/51 -14- It guaranteed by FHA or VA. Item 6(b)(1) should include loans insured under Title I if actually secured by liens on real estate. In cases -where there are first mortgages insured by the FHA in combination with second mortgages guaranteed by the VA, the first mortgage should be reported against item 6(b)(1) and the second mortgage against item 6(b)(2). "The same revisions are being made in the condition report forms used by the Comptroller of the Currency and tI10 FDIC; and the Executive Committee of the National Association of Supervisors of State Banks, at its September meeting in St. Louis, agreed to recommend the same changes in call report forms prescribed by State banking departments. Since most banks now segregate their FHA and VA loans, the additional breakdown in Schedule A should impose little, if any, additional reporting burden. "The additional data showing FHA and VA loans separately are needed to determine the nature of the expansion in residential real estate loans since June 1?50 and future changes therein, and whether the changes t:I ffer among commercial banks of various sizes or in different parts of the country. The data would also be helpful in the administration of Federal real estate credit regulations." Approved unanimously, with the understanding that the letters would be mailed when the forms have been printed. Telegram to Mr. Cook, Vice President and Cashier of the ?Eider al Reserve Bank of Dallas, reading as follows: "Reurtel November 28 concerning proposed mixedPurpose working capital loan to borrower who within Past four months has made major improvements to non! slclential structure with non-borrowed funds. We s, l i_lare your difficulty in assuming that borrower did not ;ave subsequent borrowing in mind when improvements i!ro made. Mere fact that loan will be made after 7Provements have been completed does not demonstrate ''°hclusivety that portion is not 'for the purpose of 12/3/51 -5- "financing a major addition or major improvement' vathin meaning of section 4(a)(2) of Regulation X. Questions of this type are most difficult to answer categorically and necessarily depend upon all relevant facts in each particular case, but if it clearly appears that portion of subsequent borrowing is to be used to replenish borrower's working capital used in Paying for improvements then we believe you properly Should consider that portion of loan to be subject to regulation and thereby limited to 50 per cent of cost of improvements." Approved unanimously. 41110- • tor4 4.440 Secretary.