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Board of Governors of the Federal Reserve System
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Federal Reserve Board of Governors

Federal Reserve Act


Section 24A. Investment in Bank Premises or Stock of Corporation Holding Premises

(a) Conditions Of Investment. No national bank or State member bank shall invest in bank premises, or in the stock, bonds, debentures, or other such obligations of any corporation holding the premises of such bank, or make loans to or upon the security of any such corporation--

  1. unless the bank receives the prior approval of the Comptroller of the Currency (with respect to a national bank) or the Board (with respect to a State member bank);
  2. unless the aggregate of all such investments and loans, together with the amount of any indebtedness incurred by any such corporation that is an affiliate of the bank, is less than or equal to the amount of the capital stock of such bank; or
  3. unless--
    1. the aggregate of all such investments and loans, together with the amount of any indebtedness incurred by any such corporation that is an affiliate of the bank, is less than or equal to 150 percent of the capital and surplus of the bank; and
    2. the bank--
      1. has a CAMEL composite rating of 1 or 2 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system) as of the most recent examination of such bank;
      2. is well capitalized and will continue to be well capitalized after the investment or loan; and
      3. provides notification to the Comptroller of the Currency (with respect to a national bank) or to the Board (with respect to a State member bank) not later than 30 days after making the investment or loan.

(b) Definitions. For purposes of this section--

  1. the term "affiliate" has the same meaning as in section 2 of the Banking Act of 1933; and
  2. the term "well capitalized" has the same meaning as in section 38(b) of the Federal Deposit Insurance Act.

[12 USC 371d. As added by act of June 16, 1933 (48 Stat. 183); amended by acts of June 30, 1954 (68 Stat. 358) and Sept. 30, 1996 (110 Stat. 3009-405).]

Last update: May 23, 2013