--- kind: "section" citation: "12 U.S.C. § 301" title: "12" title_heading: "Banks and Banking" number: "301" heading: "Powers and duties of board of directors; suspension of member bank for undue use of bank credit" release: "119-102" date: "2026-07-12" url: "https://uscodex.org/usc/12/301" units: - "Chapter 3 — Federal Reserve System" - "Subchapter VII — Directors of Federal Reserve Banks; Reserve Agents and Assistants" --- # §301. Powers and duties of board of directors; suspension of member bank for undue use of bank credit Every Federal [reserve bank](/usc/12/221a.md?p=a) shall be conducted under the supervision and control of a [board](/usc/12/221a.md?p=a) of [directors](/usc/12/5481.md?p=10). The [board](/usc/12/221a.md?p=a) of [directors](/usc/12/5481.md?p=10) shall perform the duties usually appertaining to the office of [directors](/usc/12/5481.md?p=10) of banking associations and all such duties as are prescribed by law. Said [board](/usc/12/221a.md?p=a) of [directors](/usc/12/5481.md?p=10) shall administer the affairs of said bank fairly and impartially and without discrimination in favor of or against any [member bank](/usc/12/221a.md?p=a) or [banks](/usc/12/221a.md?p=a) and may, subject to the provisions of law and the orders of the [Board](/usc/12/221a.md?p=a) of Governors of the Federal Reserve System, extend to each [member bank](/usc/12/221a.md?p=a) such discounts, advancements, and accommodations as may be safely and reasonably made with due regard for the claims and demands of other [member banks](/usc/12/221a.md?p=a), the maintenance of sound [credit](/usc/12/5481.md?p=7) conditions, and the accommodation of commerce, industry, and agriculture. The [Board](/usc/12/221a.md?p=a) of Governors of the Federal Reserve System may prescribe regulations further defining within the limitations of this chapter the conditions under which discounts, advancements, and the accommodations may be extended to [member banks](/usc/12/221a.md?p=a). Each Federal [reserve bank](/usc/12/221a.md?p=a) shall keep itself informed of the general character and amount of the loans and investments of its [member banks](/usc/12/221a.md?p=a) with a view to ascertaining whether undue use is being made of bank [credit](/usc/12/5481.md?p=7) for the speculative carrying of or trading in securities, [real estate](/usc/12/1707.md?p=g), or commodities, or for any other purpose inconsistent with the maintenance of sound [credit](/usc/12/5481.md?p=7) conditions; and, in determining whether to grant or refuse advances, rediscounts, or other [credit](/usc/12/5481.md?p=7) accommodations, the Federal [reserve bank](/usc/12/221a.md?p=a) shall give consideration to such information. The chairman of the Federal [reserve bank](/usc/12/221a.md?p=a) shall report to the [Board](/usc/12/221a.md?p=a) of Governors of the Federal Reserve System any such undue use of bank [credit](/usc/12/5481.md?p=7) by any [member bank](/usc/12/221a.md?p=a), together with his recommendation. Whenever, in the judgment of the [Board](/usc/12/221a.md?p=a) of Governors of the Federal Reserve System, any [member bank](/usc/12/221a.md?p=a) is making such undue use of bank [credit](/usc/12/5481.md?p=7), the [Board](/usc/12/221a.md?p=a) may, in its discretion, after reasonable notice and an opportunity for a hearing, suspend such bank from the use of the [credit](/usc/12/5481.md?p=7) facilities of the Federal Reserve System and may terminate such suspension or may renew it from time to time. ## Source credit (Dec. 23, 1913, ch. 6, § 4 (pars.), 38 Stat. 255; June 16, 1933, ch. 89, § 3(a), 48 Stat. 163; Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704.) ## Notes ### Editorial Notes ### References in Text This chapter, referred to in text, was in the original “this Act”, meaning act Dec. 23, 1913, ch. 6, 38 Stat. 251, known as the Federal Reserve Act. For complete classification of this Act to the Code, see References in Text note set out under section 226 of this title and Tables. ### Codification Section is comprised of pars. 6 to 8 of section 4 of act Dec. 23, 1913. Pars. 1 to 3 and 25 of section 4 were omitted from the code as executed. Pars. 4 and 5, 9 to 12, 13 to 15, 16 to 21, 22, 24, and 26 of section 4, and par. 23 of section 4 as added June 21, 1917, ch. 32, § 2, 40, Stat. 232, are classified to sections 341, 302, 303, 304, 305, 307, 308, and 306, respectively, of this title. ### Amendments 1933—Act June 16, 1933, among other changes, added all after first sentence in third par. ### 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.