requiring such reports to be made is mandatory; but they are required to contain only such information, as in the judgment of the Federal Reserve Board, shall be necessary to disclose fully the relations between such affiliate and such bank and to enable the Board to inform itself as to the effect of such relations upon the affairs of such bank. The reports of affiliates are to be published by the bank under the same conditions as govern its own condition reports. A penalty is prescribed for a failure to obtain and furnish any such report.
(Substantially the same provisions are contained in Section 27 of the Act with reference to reports of affiliates of national banks, except that the reports are made to the Comptroller of the Currency instead of the Federal Reserve Board.)
Dealings in stocks and investment securities by State member banks.
State member banks shall be subject to the same limitations and conditions as are national banks with respect to the purchase, sale, underwriting and holding of investment securities and stock.
(The provisions on this subject regarding national banks are in Section 16 of the Act.)
Divorce of stock of State member bank from stock of other corporations.
After one year from the passage of the Act, no certificate of stock of a State member bank shall represent the stock of any other corporation, except a member bank or a corporation existing when the provision takes effect engaged solely in holding the bank premises of such State member bank; nor shall the ownership or transfer of the stock certificate of such a bank be conditioned upon the ownership or transfer of a certificate of stock of another corporation except a member bank.
(Similar provisions on this subject applicable to the stock of national banks are found in Section 18 of the Act.)
Right of an affiliate of a State member bank to vote stock held by it in such bank.
Each State member bank affiliated with a holding company affiliate is required to obtain from such affiliate, within a period prescribed by the Board, an agreement that the affiliate will be subject to the same conditions and limitations with respect to voting stock in the bank as are applicable in the case of holding company affiliates of national banks (under Section 19 of the Act); and for failure so to do the membership of the State bank in the Federal Reserve System may be forfeited. If the Board revokes the voting permit (required by Section 19) of any holding company affiliate, the membership of any State member bank affiliated with it may be forfeited.
Examination of the affiliates of State member banks.
The Act requires such examinations of affiliates of State member banks to be made in connection with the examination of such banks as shall be necessary to disclose fully the relations between such banks and their affiliates and the effect of such relations; the expenses of such examinations may, in the discretion of the Board, be assessed against the bank examined; and, in the event of the refusal of the affiliate to give information or to permit an examination, or in the event of the failure of the bank to pay the cost thereof, the membership of the bank may be forfeited.
(Provisions with reference to examinations of affiliates of national banks are contained in Section 28 of the Act.)
Terms of Federal Reserve Board Members.
Section 10 of the Federal Reserve Act is amended so that, upon the expiration of the term of any appointive member of the Federal Reserve Board now in office, the term of his successor shall be fixed by the President at not more than twelve years in such manner as to provide for the expiration of the term of not more than one appointive member in any two-year period, and thereafter each appointive member shall hold office for a term of twelve years from the expiration of the term of his predecessor.
Offices of the Federal Reserve Board.
The provision of existing law that the Secretary of the Treasury may assign offices in the Treasury Department for the use of the Board is repealed.
