---
kind: "range"
citation: "12 U.S.C. §§ 601–604a"
title: "12"
from: "601"
to: "604a"
count: 5
release: "119-102"
url: "https://uscodex.org/usc/12/601..604a"
---

# §601. Authorization; conditions and regulations


Any [national banking association](/usc/12/221a.md?p=a) possessing a [capital](/usc/12/51c.md) and surplus of $1,000,000 or more may file application with the [Board](/usc/12/221a.md?p=a) of Governors of the Federal Reserve System for permission to exercise, upon such conditions and under such regulations as may be prescribed by the said [board](/usc/12/221a.md?p=a), the following powers:

First. To establish branches in foreign countries or dependencies or insular possessions of the United States for the furtherance of the foreign commerce of the United States, and to act if required to do so as fiscal agents of the United States.

Second. To invest an amount not exceeding in the aggregate 10 per centum of its paid-in [capital stock](/usc/12/51c.md) and surplus in the stock of one or more [banks](/usc/12/221a.md?p=a) or [corporations](/usc/12/2277a.md?p=2) chartered or incorporated under the laws of the United States or of any [State](/usc/12/1707.md?p=d) thereof, and principally engaged in international or foreign banking, or banking in a dependency or insular possession of the United States either directly or through the [agency](/usc/12/1422.md?p=12), ownership, or [control](/usc/12/24a.md?p=g-1) of local institutions in foreign countries, or in such dependencies or insular possessions.

Third. To [acquire](/usc/12/1467a.md?p=a-1-J) and hold, directly or indirectly, stock or other evidences of ownership in one or more [banks](/usc/12/221a.md?p=a) organized under the law of a foreign country or a dependency or insular possession of the United States and not engaged, directly or indirectly, in any activity in the United States except as, in the judgment of the [Board](/usc/12/221a.md?p=a) of Governors of the Federal Reserve System, shall be incidental to the international or foreign business of such [foreign bank](/usc/12/1817.md?p=j-9-B-i); and, notwithstanding the provisions of [section 371c of this title](/usc/12/371c.md), to make loans or extensions of [credit](/usc/12/5481.md?p=7) to or for the account of such [bank](/usc/12/1426a.md?p=g-1) in the manner and within the limits prescribed by the [Board](/usc/12/221a.md?p=a) by general or specific regulation or ruling.

Until January 1, 1921, any [national banking association](/usc/12/221a.md?p=a), without regard to the amount of its [capital](/usc/12/51c.md) and surplus, may file application with the [Board](/usc/12/221a.md?p=a) of Governors of the Federal Reserve System for permission, upon such conditions and under such regulations as may be prescribed by said [board](/usc/12/221a.md?p=a), to invest an amount not exceeding in the aggregate 5 per centum of its paid-in [capital](/usc/12/51c.md) and surplus in the stock of one or more [corporations](/usc/12/2277a.md?p=2) chartered or incorporated under the laws of the United States or of any [State](/usc/12/1707.md?p=d) thereof and, regardless of its location, principally engaged in such phases of international or foreign financial operations as may be necessary to facilitate the export of goods, wares, or merchandise from the United States or any of its dependencies or insular possessions to any foreign country: Provided, however, That in no event shall the total investments authorized by this subchapter by any one [national bank](/usc/12/221a.md?p=a) exceed 10 per centum of its [capital](/usc/12/51c.md) and surplus.

Such application shall specify the name and [capital](/usc/12/51c.md) of the banking [association](/usc/12/1828.md?p=s-4-E-i) filing it, the powers applied for, and the place or places where the banking or financial operations proposed are to be carried on. The [Board](/usc/12/221a.md?p=a) of Governors of the Federal Reserve System shall have power to approve or to reject such application in whole or in part if for any reason the granting of such application is deemed inexpedient, and shall also have power from time to time to increase or decrease the number of places where such banking operations may be carried on.


# §602. Reports and examinations


Every [national banking association](/usc/12/221a.md?p=a) operating foreign branches shall be required to furnish information concerning the condition of such branches to the Comptroller of the Currency upon demand, and every [member bank](/usc/12/221a.md?p=a) investing in the [capital stock](/usc/12/51c.md) of [banks](/usc/12/221a.md?p=a) or [corporations](/usc/12/2277a.md?p=2) described in [section 601 of this title](/usc/12/601.md) shall be required to furnish information concerning the condition of such [banks](/usc/12/221a.md?p=a) or [corporations](/usc/12/2277a.md?p=2) to the [Board](/usc/12/221a.md?p=a) of Governors of the Federal Reserve System upon demand, and the [Board](/usc/12/221a.md?p=a) of Governors of the Federal Reserve System may order special examinations of the said branches, [banks](/usc/12/221a.md?p=a), or [corporations](/usc/12/2277a.md?p=2) at such time or times as it may deem best.


# §603. Restrictions imposed by Board of Governors of the Federal Reserve System on banks purchasing stock in corporations doing foreign business


Before any [national bank](/usc/12/221a.md?p=a) shall be permitted to purchase stock in any [corporation](/usc/12/2277a.md?p=2) described in [section 601 of this title](/usc/12/601.md), the said [corporation](/usc/12/2277a.md?p=2) shall enter into an agreement or undertaking with the [Board](/usc/12/221a.md?p=a) of Governors of the Federal Reserve System to restrict its operations or conduct its business in such manner or under such limitations and restrictions as the said [board](/usc/12/221a.md?p=a) may prescribe for the place or places wherein such business is to be conducted. If at any time the [Board](/usc/12/221a.md?p=a) of Governors of the Federal Reserve System shall ascertain that the regulations prescribed by it are not being complied with, said [board](/usc/12/221a.md?p=a) is authorized and empowered to institute an investigation of the matter and to send for [persons](/usc/12/5481.md?p=19) and papers, subpoena witnesses, and administer oaths in order to satisfy itself as to the actual nature of the transactions referred to. Should such investigation result in establishing the failure of the [corporation](/usc/12/2277a.md?p=2) in question, or of the [national bank](/usc/12/221a.md?p=a) or [banks](/usc/12/221a.md?p=a) which may be stockholders therein, to comply with the regulations laid down by the said [Board](/usc/12/221a.md?p=a) of Governors of the Federal Reserve System, such [national banks](/usc/12/221a.md?p=a) may be required to dispose of stock holdings in the said [corporation](/usc/12/2277a.md?p=2) upon reasonable notice.


# §604. Accounts of foreign branches; profit and loss


Every [national banking association](/usc/12/221a.md?p=a) operating foreign branches shall conduct the accounts of each foreign branch independently of the accounts of other foreign branches established by it and of its home [office](/usc/12/2279bb.md?p=4), and shall at the end of each fiscal period transfer to its general ledger the profit or loss accrued at each branch as a separate item.


# §604a. Regulations authorizing exercise by foreign branches of usual powers of local banks; restrictions


Regulations issued by the [Board](/usc/12/221a.md?p=a) of Governors of the Federal Reserve System under this subchapter, in addition to regulating powers which a foreign branch may exercise under other provisions of law, may authorize such a foreign branch, subject to such conditions and requirements as such regulations may prescribe, to exercise such further powers as may be usual in connection with the transaction of the business of banking in the places where such foreign branch shall transact business. Such regulations shall not authorize a foreign branch to engage in the general business of producing, distributing, buying or selling goods, wares, or merchandise; nor, except to such limited extent as the [Board](/usc/12/221a.md?p=a) may deem to be necessary with respect to securities issued by any “foreign [state](/usc/12/1707.md?p=d)” as defined in [section 632 of this title](/usc/12/632.md), shall such regulations authorize a foreign branch to engage or [participate](/usc/12/2206a.md?p=a-1), directly or indirectly, in the business of underwriting, selling, or distributing securities.