Title 12 — Banks and Banking

Chapter 3 — Federal Reserve System

§ 412. Application for notes; collateral required

Statutory text

Any Federal Reserve bank may make application to the local Federal Reserve agent for such amount of the Federal Reserve notes hereinbefore provided for as it may require. Such application shall be accompanied with a tender to the local Federal Reserve agent of collateral in amount equal to the sum of the Federal Reserve notes thus applied for and issued pursuant to such application. The collateral security thus offered shall be notes, drafts, bills of exchange, or acceptances acquired under section 92, 342 to 348, 349 to 352, 361, 372, or 373 of this title, or bills of exchange endorsed by a member bank of any Federal Reserve district and purchased under the provisions of sections 348a and 353 to 359 of this title, or bankers’ acceptances purchased under the provisions of said sections 348a and 353 to 359 of this title, or gold certificates, or Special Drawing Right certificates, or any obligations which are direct obligations of, or are fully guaranteed as to principal and interest by, the United States or any agency thereof, or assets that Federal Reserve banks may purchase or hold under sections 348a and 353 to 359 of this title or any other asset of a Federal Reserve bank. In no event shall such collateral security be less than the amount of Federal Reserve notes applied for. The Federal Reserve agent shall each day notify the Board of Governors of the Federal Reserve System of all issues and withdrawals of Federal Reserve notes to and by the Federal Reserve bank to which he is accredited. The said Board of Governors of the Federal Reserve System may at any time call upon a Federal Reserve bank for additional security to protect the Federal Reserve notes issued to it. Collateral shall not be required for Federal Reserve notes which are held in the vaults of, or are otherwise held by or on behalf of, Federal Reserve banks.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1913
Pub. L. 63–6 § 16 · 38 Stat. 103
Enacted · 12 U.S.C. § 412
Dec. 23, 1913, ch. 6, § 16 (par.), 38 Stat. 265
Source evidence
Code source credit
Dec. 23, 1913, ch. 6, § 16 (par.), 38 Stat. 265
1968
Special Drawing Rights Act
Pub. L. 90–349 § 5(a) · 82 Stat. 188
Added · 12 U.S.C. § 412
Pub. L. 90–349 added Special Drawing Right certificates to the types of allowable collateral security which may be tendered for Federal Reserve notes
Source evidence
Code amendment note
Pub. L. 90–349 added Special Drawing Right certificates to the types of allowable collateral security which may be tendered for Federal Reserve notes.
Enacted provision · exact public law section
(a) The third sentence of the second paragraph of section 16 of the Federal Reserve Act, as amended (12 U.S.C. 412), is amended 59 Stat. 237. by inserting “or Special Drawing Right certificates,” after “gold certificates,”.
1978
Financial Institutions Regulatory and Interest Rate Control Act of 1978
Pub. L. 95–630 title I § 113 · 92 Stat. 3641
Substituted · 12 U.S.C. § 412
Pub. L. 95–630 substituted “any obligations which are direct obligations of, or are fully guaranteed as to principal and interest by, the United States or any agency thereof” of “direct obligations of the United States”
Source evidence
Code amendment note
Pub. L. 95–630 substituted “any obligations which are direct obligations of, or are fully guaranteed as to principal and interest by, the United States or any agency thereof” of “direct obligations of the United States”.
Enacted provision · exact public law section
Sec. 113. The third sentence of the second paragraph of section 16 of the Federal Reserve Act (12 U.S.C. 412) is amended by striking the words “direct obligations of the United States” and inserting in lieu thereof the words “any obligations which are direct obligations of, or are fully guaranteed as to principal and interest by, the United States or any agency thereof;”.
1980
Monetary Control Act of 1980
Pub. L. 96–221 title I § 105(b)(1) · 94 Stat. 131
Inserted · 12 U.S.C. § 412
Pub. L. 96–221 inserted provisions relating to purchase, etc., of assets by Federal Reserve banks, and eliminating collateral requirement for Federal Reserve notes held in Federal Reserve bank vaults
Source evidence
Code amendment note
Pub. L. 96–221 inserted provisions relating to purchase, etc., of assets by Federal Reserve banks, and eliminating collateral requirement for Federal Reserve notes held in Federal Reserve bank vaults.
Enacted provision · exact public law section
(1) The second paragraph of section 16 of the Federal Reserve Act (12 U.S.C. 412) is amended— (A) by inserting before the period at the end of the third sentence the following: or assets that Federal Reserve banks 12 USC 353–359, 348a. may purchase or hold under section 14 of this Act”; and (B) by adding at the end thereof the following: “Collateral shall not be required for Federal Reserve notes which are held in the vaults of Federal Reserve banks.”.
Effective date note
Amendment by Pub. L. 96–221 effective on first day of sixth month which begins after Mar. 31, 1980, see section 108 of Pub. L. 96–221, set out as a note under section 248 of this title.
1999
Pub. L. 106–122 · 113 Stat. 1638
Substituted · 12 U.S.C. § 412
Pub. L. 106–122 substituted “acceptances acquired under section 92, 342 to 348, 349 to 352, 361, 372, or 373 of this title” for “acceptances acquired under the provisions of sections 92, 342 to 347, 347c, 347d, 361, 372, and 373 of this title”
Source evidence
Code amendment note
Pub. L. 106–122 substituted “acceptances acquired under section 92, 342 to 348, 349 to 352, 361, 372, or 373 of this title” for “acceptances acquired under the provisions of sections 92, 342 to 347, 347c, 347d, 361, 372, and 373 of this title”.
2003
Pub. L. 108–100 § 19(d) · 117 Stat. 1177
Inserted · 12 U.S.C. § 412
Pub. L. 108–100 inserted “or any other asset of a Federal Reserve bank” before period at end of third sentence and “, or are otherwise held by or on behalf of,” after “in the vaults of” in last sentence
Source evidence
Code amendment note
Pub. L. 108–100 inserted “or any other asset of a Federal Reserve bank” before period at end of third sentence and “, or are otherwise held by or on behalf of,” after “in the vaults of” in last sentence.
Enacted provision · exact public law section
(d) Technical Amendment.— The second undesignated paragraph of section 16 of the Federal Reserve Act (12 U.S.C. 412) is amended— (1) in the third sentence, by inserting “or any other asset of a Federal reserve bank” before the period at the end; and (2) in the last sentence, by inserting “, or are otherwise held by or on behalf of,” after “in the vaults of  ”.

4 of 6 references resolved to an enrolled provision · 2 partial

Editorial Notes

Codification

Section is comprised of second par. of section 16 of act Dec. 23, 1913. For classification to this title of other pars. of section 16, see Codification note set out under section 411 of this title.

Amendments1932–2003 · 13 rounds

2003

Pub. L. 108–100 inserted “or any other asset of a Federal Reserve bank” before period at end of third sentence and “, or are otherwise held by or on behalf of,” after “in the vaults of” in last sentence.

1999

Pub. L. 106–122 substituted “acceptances acquired under section 92, 342 to 348, 349 to 352, 361, 372, or 373 of this title” for “acceptances acquired under the provisions of sections 92, 342 to 347, 347c, 347d, 361, 372, and 373 of this title”.

1980

Pub. L. 96–221 inserted provisions relating to purchase, etc., of assets by Federal Reserve banks, and eliminating collateral requirement for Federal Reserve notes held in Federal Reserve bank vaults.

1978

Pub. L. 95–630 substituted “any obligations which are direct obligations of, or are fully guaranteed as to principal and interest by, the United States or any agency thereof” of “direct obligations of the United States”.

1968

Pub. L. 90–349 added Special Drawing Right certificates to the types of allowable collateral security which may be tendered for Federal Reserve notes.

1945

Act June 12, 1945, substituted “, or direct obligations of the United States.” for proviso after “gold certificates” in first sentence which limited period during which direct obligations of the United States could be accepted as collateral security.

1943

Act May 25, 1943, substituted “June 30, 1945” for “June 30, 1943,” in proviso.

1941

Act June 30, 1941, substituted “June 30, 1943” for “June 30, 1941” in proviso.

1939

Act June 30, 1939, substituted “June 30, 1941” for “June 30, 1939” in proviso.

1937

Act Mar. 1, 1937, extended until June 30, 1939, period within which direct obligations of the United States may be accepted as collateral security under this section, and struck out provision authorizing President to extend period.

1934

Act Mar. 6, 1934, amended proviso and two sentences immediately following.

Act Jan. 30, 1934, amended portion of third sentence before proviso.

1933

Act Feb. 3, 1933, substituted “March 3, 1934” for “March 3, 1933” wherever appearing.

1932

Act Feb. 27, 1932, inserted proviso and two sentences immediately following.

Statutory Notes and Related Subsidiaries

Change 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.

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–221 effective on first day of sixth month which begins after Mar. 31, 1980, see section 108 of Pub. L. 96–221, set out as a note under section 248 of this title.

Effective Date of 1978 Amendment

Amendment effective upon expiration of 120 days after Nov. 10, 1978, see sec. 2101 of Pub. L. 95–630 set out as an Effective Date note under section 375b of this title.

United States Obligations as Collateral; Extension of Period

The period within which direct obligations of the United States could be accepted as collateral security under this section was extended to Mar. 3, 1937, by Proclamation No. 2117, of Feb. 14, 1935, 49 Stat. 3437; extended to June 30, 1939, by act Mar. 1, 1937; extended to June 30, 1941, by act June 30, 1939; extended to June 30, 1943, by act June 30, 1941; and extended to June 30, 1945, by act May 25, 1943. Act June 12, 1945, amended section to remove the time limitation.

Credits

1913–2003 · 18 acts

1913Dec. 23, 1913, ch. 6, § 16 (par.), 38 Stat. 265
1916Sept. 7, 1916, ch. 461, 39 Stat. 754
1917June 21, 1917, ch. 32, § 7, 40 Stat. 236
1932Feb. 27, 1932, ch. 58, § 3, 47 Stat. 57
1933Feb. 3, 1933, ch. 34, 47 Stat. 794
1934Jan. 30, 1934, ch. 6, § 2(b)(2), 48 Stat. 338
1934Mar. 6, 1934, ch. 47, 48 Stat. 398
1935Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704
1937Mar. 1, 1937, ch. 20, 50 Stat. 23
1939June 30, 1939, ch. 256, 53 Stat. 991
1941June 30, 1941, ch. 264, 55 Stat. 395
1943May 25, 1943, ch. 102, 57 Stat. 85
1945June 12, 1945, ch. 186, § 2, 59 Stat. 237
1968Pub. L. 90–349, § 5(a), June 19, 1968, 82 Stat. 189
1978Pub. L. 95–630, title I, § 113, Nov. 10, 1978, 92 Stat. 3671
1980Pub. L. 96–221, title I, § 105(b)(1), Mar. 31, 1980, 94 Stat. 140
1999Pub. L. 106–122, Dec. 6, 1999, 113 Stat. 1638
2003Pub. L. 108–100, § 19(d), Oct. 28, 2003, 117 Stat. 1193.

Show as published

(Dec. 23, 1913, ch. 6, § 16 (par.), 38 Stat. 265; Sept. 7, 1916, ch. 461, 39 Stat. 754; June 21, 1917, ch. 32, § 7, 40 Stat. 236; Feb. 27, 1932, ch. 58, § 3, 47 Stat. 57; Feb. 3, 1933, ch. 34, 47 Stat. 794; Jan. 30, 1934, ch. 6, § 2(b)(2), 48 Stat. 338; Mar. 6, 1934, ch. 47, 48 Stat. 398; Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704; Mar. 1, 1937, ch. 20, 50 Stat. 23; June 30, 1939, ch. 256, 53 Stat. 991; June 30, 1941, ch. 264, 55 Stat. 395; May 25, 1943, ch. 102, 57 Stat. 85; June 12, 1945, ch. 186, § 2, 59 Stat. 237; Pub. L. 90–349, § 5(a), June 19, 1968, 82 Stat. 189; Pub. L. 95–630, title I, § 113, Nov. 10, 1978, 92 Stat. 3671; Pub. L. 96–221, title I, § 105(b)(1), Mar. 31, 1980, 94 Stat. 140; Pub. L. 106–122, Dec. 6, 1999, 113 Stat. 1638; Pub. L. 108–100, § 19(d), Oct. 28, 2003, 117 Stat. 1193.)