national bank, however, is subject to removal by a proper court, to the same extent as was the constituent corporation, but the right of removal shall not be exercised so as to discriminate against national banks.
Rate of interest on loans.
Section 5197 of the Revised Statutes is amended so that national banks could charge on loans and discounts, (1) the rate of interest allowed by the State law (or 7% where the State law fixes no limit), or (2) a rate of 1% in excess of the Federal reserve bank discount rate, whichever may be the greater.
Limitations on loans to affiliated corporations.
The Act amends the first paragraph of Section 5200 of the Revised Statutes to provide that in computing the amount which a corporation can borrow from a national bank, the corporation and all of its subsidiaries in which such corporation owns or controls a majority interest would be treated as a single borrower; (but this would not apply to existing obligations of such a subsidiary to a bank).
Reports of affiliates of national banks.
This section amends Section 5211 of the Revised Statutes so as to provide that a national bank shall obtain from each of its affiliates, other than member banks, and furnish to the Comptroller of the Currency not less than three reports each year on the same dates on which condition reports are required of the bank and such additional reports as the Comptroller may deem necessary. The term "affiliate" includes holding company affiliate. Such reports are required to contain such information as in the judgment of the Comptroller shall be necessary to disclose fully the relations between such affiliate and such bank and as to the effect of such relations upon the affairs of such bank, and shall be published by the bank on the same conditions as govern its own condition reports. The bank is subject to a penalty for failure to render such reports.
(Substantially the same provisions are contained in Section 5(c) of the Act with reference to reports of affiliates of State member banks, except that the reports are to be made to the Federal Reserve Board instead of to the Comptroller of the Currency.)
Examinations of affiliates of national banks.
Section 5240 of the Revised Statutes is amended so as to require that examiners in making the examination of any national bank shall include such an examination of the affairs of all of its affiliates, other than member banks, as shall be necessary to disclose fully the relations between the bank and its affiliates and the effect thereof; and authorizes the forfeiture of the franchise of the bank in the event of the refusal of the affiliate to give information or to permit such an examination.
The Comptroller of the Currency is authorized to publish an examination report of a national bank or affiliate after 90 days' notice if the bank or affiliate fails to comply within 120 days with his recommendations based on such examination.
The examiner making the examination of the affiliate is authorized to examine officers and employees thereof under oath. The expenses of the examination may be assessed by the Comptroller against the affiliate and, if not paid by the affiliate, against the national bank. A refusal by the affiliate to permit an examination or to give information makes the national bank with which it is affiliated subject to penalty of $100 per day.
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