View all text of Subchapter I [§ 21 - § 43]

§ 24. Corporate powers of associations

Upon duly making and filing articles of association and an organization certificate a national banking association shall become, as from the date of the execution of its organization certificate, a body corporate, and as such, and in the name designated in the organization certificate, it shall have power—

First. To adopt and use a corporate seal.

Second. To have succession from February 25, 1927, or from the date of its organization if organized after February 25, 1927, until such time as it be dissolved by the act of its shareholders owning two-thirds of its stock, or until its franchise becomes forfeited by reason of violation of law, or until terminated by either a general or a special Act of Congress or until its affairs be placed in the hands of a receiver and finally wound up by him.

Third. To make contracts.

Fourth. To sue and be sued, complain and defend, in any court of law and equity, as fully as natural persons.

Fifth. To elect or appoint directors, and by its board of directors to appoint a president, vice president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers or any of them at pleasure, and appoint others to fill their places.

Sixth. To prescribe, by its board of directors, bylaws not inconsistent with law, regulating the manner in which its stock shall be transferred, its directors elected or appointed, its officers appointed, its property transferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed.

Seventh. To exercise by its board of directors or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking; by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin, and bullion; by loaning money on personal security; and by obtaining, issuing, and circulating notes according to the provisions of title 62 of the Revised Statutes. The business of dealing in securities and stock by the association shall be limited to purchasing and selling such securities and stock without recourse, solely upon the order, and for the account of, customers, and in no case for its own account, and the association shall not underwrite any issue of securities or stock; Provided, That the association may purchase for its own account investment securities under such limitations and restrictions as the Comptroller of the Currency may by regulation prescribe. In no event shall the total amount of the investment securities of any one obligor or maker, held by the association for its own account, exceed at any time 10 per centum of its capital stock actually paid in and unimpaired and 10 per centum of its unimpaired surplus fund, except that this limitation shall not require any association to dispose of any securities lawfully held by it on August 23, 1935. As used in this section the term “investment securities” shall mean marketable obligations, evidencing indebtedness of any person, copartnership, association, or corporation in the form of bonds, notes and/or debentures commonly known as investment securities under such further definition of the term “investment securities” as may by regulation be prescribed by the Comptroller of the Currency. Except as hereinafter provided or otherwise permitted by law, nothing herein contained shall authorize the purchase by the association for its own account of any shares of stock of any corporation. The limitations and restrictions herein contained as to dealing in, underwriting and purchasing for its own account, investment securities shall not apply to obligations of the United States, or general obligations of any State or of any political subdivision thereof, or obligations of the Washington Metropolitan Area Transit Authority which are guaranteed by the Secretary of Transportation under section 9 of the National Capital Transportation Act of 1969, or obligations issued under authority of the Federal Farm Loan Act, as amended, or issued by the thirteen banks for cooperatives or any of them or the Federal Home Loan Banks, or obligations which are insured by the Secretary of Housing and Urban Development under title XI of the National Housing Act [12 U.S.C. 1749aaa et seq.] or obligations which are insured by the Secretary of Housing and Urban Development (hereinafter in this sentence referred to as the “Secretary”) pursuant to section 207 of the National Housing Act [12 U.S.C. 1713], if the debentures to be issued in payment of such insured obligations are guaranteed as to principal and interest by the United States, or obligations, participations, or other instruments of or issued by the Federal National Mortgage Association, or the Government National Mortgage Association, or mortgages, obligations or other securities which are or ever have been sold by the Federal Home Loan Mortgage Corporation pursuant to section 305 or section 306 of the Federal Home Loan Mortgage Corporation Act [12 U.S.C. 1454 or 1455], or obligations of the Federal Financing Bank or obligations of the Environmental Financing Authority, or obligations or other instruments or securities of the Student Loan Marketing Association, or such obligations of any local public agency (as defined in section 110(h) of the Housing Act of 1949 [42 U.S.C. 1460(h)]) as are secured by an agreement between the local public agency and the Secretary in which the local public agency agrees to borrow from said Secretary, and said Secretary agrees to lend to said local public agency, monies in an aggregate amount which (together with any other monies irrevocably committed to the payment of interest on such obligations) will suffice to pay, when due, the interest on and all installments (including the final installment) of the principal of such obligations, which monies under the terms of said agreement are required to be used for such payments, or such obligations of a public housing agency (as defined in the United States Housing Act of 1937, as amended [42 U.S.C. 1437 et seq.]) as are secured (1) by an agreement between the public housing agency and the Secretary in which the public housing agency agrees to borrow from the Secretary, and the Secretary agrees to lend to the public housing agency, prior to the maturity of such obligations, monies in an amount which (together with any other monies irrevocably committed to the payment of interest on such obligations) will suffice to pay the principal of such obligations with interest to maturity thereon, which monies under the terms of said agreement are required to be used for the purpose of paying the principal of and the interest on such obligations at their maturity, (2) by a pledge of annual contributions under an annual contributions contract between such public housing agency and the Secretary if such contract shall contain the covenant by the Secretary which is authorized by subsection (g) of section 6 of the United States Housing Act of 1937, as amended [42 U.S.C. 1437d(g)], and if the maximum sum and the maximum period specified in such contract pursuant to said subsection 6(g) [42 U.S.C. 1437d(g)] shall not be less than the annual amount and the period for payment which are requisite to provide for the payment when due of all installments of principal and interest on such obligations, or (3) by a pledge of both annual contributions under an annual contributions contract containing the covenant by the Secretary which is authorized by section 6(g) of the United States Housing Act of 1937 [42 U.S.C. 1437d(g)], and a loan under an agreement between the local public housing agency and the Secretary in which the public housing agency agrees to borrow from the Secretary, and the Secretary agrees to lend to the public housing agency, prior to the maturity of the obligations involved, moneys in an amount which (together with any other moneys irrevocably committed under the annual contributions contract to the payment of principal and interest on such obligations) will suffice to provide for the payment when due of all installments of principal and interest on such obligations, which moneys under the terms of the agreement are required to be used for the purpose of paying the principal and interest on such obligations at their maturity: Provided, That in carrying on the business commonly known as the safe-deposit business the association shall not invest in the capital stock of a corporation organized under the law of any State to conduct a safe-deposit business in an amount in excess of 15 per centum of the capital stock of the association actually paid in and unimpaired and 15 per centum of its unimpaired surplus. The limitations and restrictions herein contained as to dealing in and underwriting investment securities shall not apply to obligations issued by the International Bank for Reconstruction and Development, the European Bank for Reconstruction and Development, the Inter-American Development Bank 1

1 So in original. Probably should be followed by a comma.

(R.S. § 5136; July 1, 1922, ch. 257, § 1, 42 Stat. 767; Feb. 25, 1927, ch. 191, § 2, 44 Stat. 1226; June 16, 1933, ch. 89, § 16, 48 Stat. 184; Aug. 23, 1935, ch. 614, title III, § 308, 49 Stat. 709; Feb. 3, 1938, ch. 13, § 13, 52 Stat. 26; June 11, 1940, ch. 301, 54 Stat. 261; June 29, 1949, ch. 276, § 1, 63 Stat. 298; July 15, 1949, ch. 338, title VI, § 602(a), 63 Stat. 439; Apr. 9, 1952, ch. 169, 66 Stat. 49; Aug. 2, 1954, ch. 649, title II, § 203, 68 Stat. 622; Aug. 23, 1954, ch. 834, § 2, 68 Stat. 771; July 26, 1956, ch. 741, title II, § 201(c), 70 Stat. 667; Pub. L. 86–137, § 2, Aug. 6, 1959, 73 Stat. 285; Pub. L. 86–147, § 10, Aug. 7, 1959, 73 Stat. 301; Pub. L. 86–230, § 1(a), Sept. 8, 1959, 73 Stat. 457; Pub. L. 86–278, Sept. 16, 1959, 73 Stat. 563; Pub. L. 86–372, title IV, § 420, Sept. 23, 1959, 73 Stat. 679; Pub. L. 88–560, title VII, § 701(c), Sept. 2, 1964, 78 Stat. 800; Pub. L. 89–369, § 10, Mar. 16, 1966, 80 Stat. 72; Pub. L. 89–754, title V, § 504(a)(1), Nov. 3, 1966, 80 Stat. 1277; Pub. L. 90–19, § 27(a), May 25, 1967, 81 Stat. 28; Pub. L. 90–448, title VIII, §§ 804(c), 807(j), title IX, § 911, title XVII, § 1705(h), Aug. 1, 1968, 82 Stat. 543, 545, 550, 605; Pub. L. 91–375, § 6(d), Aug. 12, 1970, 84 Stat. 776; Pub. L. 92–318, title I, § 133(c)(1), June 23, 1972, 86 Stat. 269; Pub. L. 91–143, § 12(b), Dec. 9, 1969, as added Pub. L. 92–349, title I, § 101, July 13, 1972, 86 Stat. 466; Pub. L. 92–500, § 12(n), Oct. 18, 1972, 86 Stat. 902; Pub. L. 93–100, § 5(c), Aug. 16, 1973, 87 Stat. 344; Pub. L. 93–224, § 14, Dec. 29, 1973, 87 Stat. 941; Pub. L. 93–234, title II, § 207, Dec. 31, 1973, 87 Stat. 984; Pub. L. 93–383, title II, § 206, title VIII, § 805(c)(1), Aug. 22, 1974, 88 Stat. 668, 726; Pub. L. 96–221, title VII, § 711, Mar. 31, 1980, 94 Stat. 189; Pub. L. 97–35, title XIII, § 1342(a), Aug. 13, 1981, 95 Stat. 743; Pub. L. 97–320, title IV, § 404(b), Oct. 15, 1982, 96 Stat. 1511; Pub. L. 97–457, § 18, Jan. 12, 1983, 96 Stat. 2509; Pub. L. 98–440, title I, § 105(c), Oct. 3, 1984, 98 Stat. 1691; Pub. L. 98–473, title I, § 101(1) [title I, § 101], Oct. 12, 1984, 98 Stat. 1884, 1885; Pub. L. 100–86, title I, § 108, Aug. 10, 1987, 101 Stat. 579; Pub. L. 100–449, title III, § 308, Sept. 28, 1988, 102 Stat. 1877; Pub. L. 101–513, title V, § 562(c)(10)(B), (e)(1)(B), Nov. 5, 1990, 104 Stat. 2036, 2037; Pub. L. 102–485, § 6(a), Oct. 23, 1992, 106 Stat. 2774; Pub. L. 103–182, title V, § 541(h)(1), Dec. 8, 1993, 107 Stat. 2167; Pub. L. 103–325, title II, § 206(c), title III, §§ 322(a)(1), 347(b), Sept. 23, 1994, 108 Stat. 2199, 2226, 2241; Pub. L. 104–208, div. A, title I, § 101(c) [title VII, § 710(b)], title II, § 2704(d)(7), Sept. 30, 1996, 110 Stat. 3009–121, 3009–181, 3009–489; Pub. L. 106–102, title I, § 151, Nov. 12, 1999, 113 Stat. 1384; Pub. L. 109–171, title II, § 2102(b), Feb. 8, 2006, 120 Stat. 9; Pub. L. 109–173, § 9(a), Feb. 15, 2006, 119 Stat. 3616; Pub. L. 109–351, title III, § 305(a), Oct. 13, 2006, 120 Stat. 1970; Pub. L. 110–289, div. B, title V, § 2503(a), July 30, 2008, 122 Stat. 2857.)