Member bank purchase of stock of foreign operations subsidiaries.

CFR · 2024-01-01 · US · Title 12

(a) In a previous interpretation, the Board determined that a State member bank would not violate the “stock-purchase prohibition” of section 5136 of the Revised Statutes (12 U.S.C. 24 ¶ 7) by purchasing and holding the shares of a corporation which performs “at locations at which the bank is authorized to engage in business, functions that the bank is empowered to perform directly”. (b) In the above interpretation the Board viewed the creation of a wholly-owned subsidiary which engaged in activities that the bank itself could perform directly as an alternative organizational arrangement that would be permissible for member banks unless “its use would be inconsistent with other Federal law, either statutory or judicial”. (c) In the Board's judgment, the use by member banks of operations subsidiaries outside the United States would be clearly inconsistent with the statutory scheme of the Federal Reserve Act governing the foreign investments and (d) As part of the original Federal Reserve Act, national banks were, with the Board's permission, given the power to establish foreign branches. (e) To summarize, the Board has concluded that a member bank may only organize and operate

official document · source cfr-2024 · id 12:§ 250.143