From the U.S. Code Online via GPO Access
[www.gpoaccess.gov]
[Laws in effect as of January 3, 2007]
[CITE: 12USC338a]

[Page 108-109]
 
                       TITLE 12--BANKS AND BANKING
 
                    CHAPTER 3--FEDERAL RESERVE SYSTEM
 
            SUBCHAPTER VIII--STATE BANKS AS MEMBERS OF SYSTEM

 
Sec. 338a. Investments to promote public welfare and community 
        development; limitation on investments
        
    A State member bank may make investments directly or indirectly, 
each of which promotes the public welfare by benefiting primarily low- 
and moderate-income communities or families (such as by providing 
housing, services, or jobs), to the extent permissible under State law. 
A State member bank shall not make any such investment if the investment 
would expose the State member bank to unlimited liability. The Board 
shall limit a State member bank's investment in any 1 project and a 
State member bank's aggregate investments under this paragraph. The 
aggregate amount of investments of any State member bank under this 
paragraph may not exceed an amount equal to the sum of 5 percent of the 
State member bank's capital stock actually paid in and unimpaired and 5 
percent of the State member bank's unimpaired surplus, unless the Board 
determines, by order, that a higher amount will pose no significant risk 
to the affected deposit insurance fund; and the State member bank is 
adequately capitalized. In no case shall the aggregate amount of 
investments of any State member bank under this paragraph exceed an 
amount equal to the sum of 15 percent of the State member bank's capital 
stock actually paid in and unimpaired and 15 percent of the State member 
bank's unimpaired surplus. The foregoing standards and limitations apply 
to investments under this paragraph made by a State member bank directly 
and by its subsidiaries.

(Dec. 23, 1913, ch. 6, Sec. 9 (par.), as added Pub. L. 102-485, 
Sec. 6(b), Oct. 23, 1992, 106 Stat. 2774; amended Pub. L. 104-208, div. 
A, title II, Sec. 2704(d)(8), Sept. 30, 1996, 110 Stat. 3009-489; Pub. 
L. 109-171, title II, Sec. 2102(b), Feb. 8, 2006, 120 Stat. 9; Pub. L. 
109-173, Sec. 9(b), Feb. 15, 2006, 119 Stat. 3616; Pub. L. 109-351, 
title III, Sec. 305(b), Oct. 13, 2006, 120 Stat. 1971.)

                          Codification

    Section is comprised of the twenty-third par. of section 9 of act 
Dec. 23, 1913, as amended. For further details, see Codification note 
set out under section 321 of this title.


                               Amendments

    2006--Pub. L. 109-351 amended section generally. Prior to amendment, 
section read as follows: ``State member banks may make investments 
designed primarily to promote the public welfare, including the welfare 
of low- and moderate-income communities or families (such as by 
providing housing, services, or jobs), to the extent permissible under 
State law, and subject to such restrictions and requirements as the 
Board of Governors of the Federal Reserve System may prescribe by 
regulation or order. A bank shall not make any such investment if the 
investment would expose the bank to unlimited liability. The Board shall 
limit a bank's investments in any 1 project and bank's aggregate 
investments under this paragraph. A bank's aggregate investments under 
this paragraph shall not exceed an amount equal to the sum of 5 percent 
of the bank's capital stock actually paid in and unimpaired and 5 
percent of the bank's unimpaired surplus fund, unless the Board 
determines by order that the higher amount will pose no significant risk 
to the Deposit Insurance Fund, and the bank is adequately capitalized. 
In no case shall a bank's aggregate investments under this paragraph 
exceed an amount equal to the sum of 10 percent of the bank's capital 
stock actually paid in and unimpaired and 10 percent of the bank's 
unimpaired surplus fund.''
    Pub. L. 109-173, in fourth sentence, substituted ``Deposit Insurance 
Fund'' for ``affected deposit insurance fund''.
    Pub. L. 109-171 repealed Pub. L. 104-208, Sec. 2704(d)(8). See 1996 
Amendment note below.
    1996--Pub. L. 104--208, Sec. 2704(d)(8), which directed the 
amendment of the fourth sentence by substituting ``Deposit Insurance 
Fund'' for ``affected deposit insurance fund'', was repealed by Pub. L. 
109-171. See Effective

[[Page 109]]

Date of 1996 Amendment note below and 2006 Amendment note above.


                    Effective Date of 2006 Amendment

    Amendment by Pub. L. 109-173 effective Mar. 31, 2006, see section 
9(j) of Pub. L. 109-173, set out as a note under section 24 of this 
title.
    Amendment by Pub. L. 109-171 effective no later than the first day 
of the first calendar quarter that begins after the end of the 90-day 
period beginning Feb. 8, 2006, see section 2102(c) of Pub. L. 109-171, 
set out as a Merger of BIF and SAIF note under section 1821 of this 
title.


                    Effective Date of 1996 Amendment

    Amendment by Pub. L. 104-208 effective Jan. 1, 1999, if no insured 
depository institution is a savings association on that date, see 
section 2704(c) of Pub. L. 104-208, formerly set out as a note under 
section 1821 of this title.