12 U.S.C. § 371d

Investment in bank premises or stock of corporation holding premises

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(a) Conditions of investmentNo 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—(A) 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(B) the bank—(i) 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;(ii) is well capitalized and will continue to be well capitalized after the investment or loan; and(iii) 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) DefinitionsFor purposes of this section—(1) the term “affiliate” has the same meaning as in section 221a of this title; and(2) the term “well capitalized” has the same meaning as in section 1831o(b) of this title.(Dec. 23, 1913, ch. 6, § 24A, as added June 16, 1933, ch. 89, § 14, 48 Stat. 184; amended Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704; June 30, 1954, ch. 434, § 2, 68 Stat. 358; Pub. L. 104–208, div. A, title II, § 2206, Sept. 30, 1996, 110 Stat. 3009–405.)Editorial NotesAmendments

1996—Pub. L. 104–208 inserted section catchline and amended text generally. Prior to amendment, text read as follows: “No national bank, without the approval of the Comptroller of the Currency, and no State member bank, without the approval of the Board of Governors of the Federal Reserve System, shall (1) invest in bank premises, or in the stock, bonds, debentures, or other such obligations of any corporation holding the premises of such bank, or (2) make loans to or upon the security of the stock of any such corporation, if the aggregate of all such investments and loans, together with the amount of any indebtedness incurred by any such corporation which is an affiliate of the bank, as defined in section 221a of this title, will exceed the amount of the capital stock of such bank.”

1954—Act June 30, 1954, inserted “together with the amount of any indebtedness incurred by any such corporation which is an affiliate of the bank, as defined in section 221a of this title”.

Statutory Notes and Related SubsidiariesChange of Name

Section 203(a) of act Aug. 23, 1935, changed name of Federal Reserve Board to Board of Governors of the Federal Reserve System.

Executive DocumentsException as to Transfer of Functions

Functions vested by any provision of law in Comptroller of the Currency, referred to in this section, not included in transfer of functions to Secretary of the Treasury, see note set out under section 1 of this title.

Notes of Decisions

Cited in 9 cases, 1957–1983 · leading case: Frank Lyon Co. v. United States, 435 U.S. 561 (1978).

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Frank Lyon Co. v. United States, 435 U.S. 561 (1978). · cites it 2× “1977); 12 U. S. C. § 371d (1976 ed.); 12 CFR § 265.”

First Nat. Bank of Scotia v. United States, 530 F. Supp. 162 (D.D.C. 1982). · cites it 2× “BACKGROUND On February 12, 1980, the Comptroller of the Currency initiated cease and desist proceedings against plaintiffs by serving them with a notice alleging numerous unsafe and unsound banking practices and violations of 12 U.S.C. § 371d (1976). See 12 U.S.C. § 1818 (b).”

Ncnb Corp., a North Carolina Corp. North Carolina Nat'l Bank v. United States, 684 F.2d 285 (4th Cir. 1982). “§ 92a; and investing in physical premises, 12 U.S.C. § 371d.”

First Nat'l Bank of Bellaire v. Comptroller of the Currency, 697 F.2d 674 (1st Cir. 1983). “(3) In violation of 12 U.S.C. § 371d the BANK has unauthorized investments in BANK premises in excess of its capital stock.”

United States v. Connecticut Nat'l Bank, 362 F. Supp. 240 (D. Conn. 1973). · cites it 3× “Federal banking law, 12 U.S.C. § 371d, limits the investment of a national bank in “bank premises” (the bank’s head office and its branches) to the equivalent of 100% of the bank’s capital stock.”

Moore v. Georgeson, 679 P.2d 1099 (Colo. Ct. App. 1983). “See 12 U.S.C. § 371d. It is not disputed that the attempted exercise of the option occurred within the option period, and that permission was received from the Comptroller of the Currency approximately one month after the March 13, 1979 option notice was sent to Moore.”

Bank of New Bern v. Wachovia Bank & Trust Co., N. A., 353 F. Supp. 643 (E.D.N.C. 1972). “The provisions of 12 U.S.C. § 371d regarding loans to affiliates are not wholly duplicated in the state banking law”).”

Brodsky v. Perth Amboy Nat'l Bank, 156 F. Supp. 316 (D.N.J. 1957). · cites it 2× “The Bank also contends in this case that the Bank’s entry into the lease was ultra vires under 12 U.S.C.A. § 371d 3 , because the leasehold constitutes an investment in bank premises aggregating in excess of the capital stock ($500,000) of the Bank.”

McDowell Nat'l Bank v. Smith, 364 F. Supp. 640 (W.D. Pa. 1973). “The concern of the investigator over the investment in fixed assets compared with the capital stock of the bank was occasioned, no doubt, by 12 U.S.C.A. § 371d. The Act of December 23, 1913, as amended, provides the following: “No national bank, without the approval of the…”

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