cmnxascz OF TITL? II AS PASSED BY TEK aoos« Ayr «r aouao...a* tao Board atglit doos rM—• ablof h«t ac «uh bank oould Vo rooairod to lsaroaoo it* ea^ital boyoad that roojalrod

cmnxascz OF TITL? I I AS PASSED BY TEK aoos« Ayr «r tHE

aouao

1* ttaaaqoaoat of RMtnr» Saaka»

Sootioa 201 of tho ,ou«« s i l l woul&mind aootlaa 4 of tho iodsral SooorvoAot oo that tho of floo of fodwral riosonr*•gout would bo tbollohod aad tho offioooof Chairwaa of tho board of dirootort andQoToraor would bo ooablaod la * aiagloehiof oxooutivo to bo kaawn 041 tho 0*ver-»aor, who would bo appolntod omau*lly bytho boord of dirootors, Ms oriînol op*poiutaoBt omd bis roofpoiatnoat «rorythroo joaro boia« oubjoot to oyprovol bytho >od«rol Aooorro Soar** Opocby tho Fodor*! /ooorro Booxd# hoftutoBfttloolly boooao oholnMm of thoboard of dlrootors* ohalnaOA of thoutiTo o«a«i%%oo9 oaa a Claoa C di root orof tho baakf bmt# ualiko tho otb*r ClasoC dlrootora, ho wool* aot aood to havobooa a roaidont of ttio dlatriat for twoyoara* and ho would ooatiano aa a ClaoaC dlrootor only daring his aorvloo aaor«rnor, rathor than for tho uotxal

throo yoar torn to whioh th» othtrClaaa C dlroatotort aro o^polnto^ by tho

eaorro ioard*

Tho ohaagoa aoatlonod aboro wouldbooowo offootiTO ninety daya aftor on*

of tho b i l l .

would oootlon4 of tho FodoraT Roaorvo Aot to pro-vldo for a ohiof osooutivo of floor atoaoh Podaral uoaorro baak to wham al loth*r asootttiTo offloors and a l l wa-ploywoa of tho baak would bo roapos*«ibl*# aad who would bo known aa thoProaidont, Ho would bo apywintod bytho dlrootora of tho baak* subjoetto approval «vwry • ywara by tha

in ? MKiagtoiu Ho prorSalonbo wAdo for hlit to bo a dlroo-

tor of tho bank, ohalrvaa of thoboard of dlr«otor*9 er a2*tf»am oftho oawax tlTo oonwlttoo* The offlaoof tha Fodwral Bowwrvo Agost wouldaot bo aballohod and thoro would bono ohaago ia tho *xl*tlat law whichpraridoa that ono of tho Claaa Cdlrootora appointod by tho rodoral•Mrvt Board ahall •arro aa Kodoral

roawrva AC«at aad Ohairaaa of thoboard of dirootorc*

I ffootivo iawodianoly

(1) Aooopt roaat« bi l l withaawmdaomt provldisg for ap-poitttMoat of difforont porao»«aa Fodwral Koworvo agont andChairman of board of dlreotora,Tho Chairaan ahould bo a dlroo-tor aad Chairaaa of th« Esoou-tlro caaailttoo,

(2) It la dawirablo to havoProoidonta aad Viao Proaldoatsappolatod and awarorod mrory8 ywara* inatoad of rrory $yoara»

far praotiealroaaoao to aako offoetivoJanuary 1* 1996.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

• t -

Taoro would bo a Vioo Governor who*la tfao t t i t w i or disability of t&o Govoroor,or duria* * Yaoanoy lu that offloo« wouldN m a* oUtf oaoootiTo offloor of tho beak•ad Ml ohairoaa of tht baak*t oxooutlro oow-alttoo* ao would bo oaooom la %ao M Maor ao tao Govoraor aad could b«a CUM C dir»«tor« If h» **

C dir«#t«r# a* ••uXd » 1 M be *pp#lnt#4telr«ii& of ttot board of dir««tors

•at lik« taa Oov«ra«r# ho would Qoatiaao asclaao C dlrootor oaly durlac **« aorrloo a»Vloo Cjowtr»or» aai ao would not bo «tibjootto tao roftironoat of two yoart rooidoaoo intho diotriot*

Soaato

Thoro wDuld bo a Vioowao# ia tao ao*oao« or diaoallity oftao Proolaoat or vbaria^ & vaoaaoy lataat offico, wovtd oorro as oalofojeootttiTo cX tho boak* Ho would booaoooa ia tao OOMO waanor and for Xhm

ao too

Rooowooadatloao

(4) Provldo for aoro thanono loo Pr«6idont«

Vaoaaoloo la tb» off loo of viOToraor orVloo Oforaor would bo fillod ao prorldod latao oaoo of orl^laal aypolataoatt* aad fortao roaalador of tao torn of tao wrodoooooora>

Ktdoral Sioaorvo bank dlrootors, otfaortaaa tho Gtworaor oad Vloo uororaor* wouldnot bo potalttod to oorro aoro thoa two ooo>•ooutlTo torao of throo /oart ••oh, but aroo*oat laowaboato ooald oorro out tboir torao*

t« iojalaoloa of 8tato Eoaao to ltombor«alp»

gpotloa tOt would fttoad oootloa 9of tao Foatral Looonro Aot to ©omit tao

odoral •aorvo »oard# uooa tao apolloa*tloa of aa lasurod aoauwabor bank* to

la waalo or la part tho roîlro-

* iallar prorlalofi forla offioo of Prooidont or vlooProoldoat.

Qaittod ontlroly,

Aooopt Soaato provi-d e * to ooafora to aboro

Cldlttod eatiroly.

(5) first oholoo HouooBill* itagfôt ooayroalooporsiittlag throo fulltonto*

(6) r>oopa*lal that tala borotalaod li aoapuloory aoa*borsalp prorlsioa of SoaatoB U I lo rotalmod* »ot 00-aoatial if ooayuloory »oa*borahip profitIon it•triokoa out*


• s -

aoat* of tootloa 9 relating toadai«*laa to fcho Sy*toa«If caah abank m i adttlttod with oanitalloaa than that required for thoorgasdtatioa «f a aatloaal baskin tho aoao place ami It* oapltaland •urpltt* woro art, la tho 3oard*»

adooaato in rolatloa totho baak's Uabil it io* to dopo.i-tor* aad otlnsr axoditora» thoBoard oouXd rtoairo onoh bask toIsoroaoo i t* oapital aadto *«oh oaovttt a* tho Boarddo«R aooo**ary within suoa perioda* tao Board atglit doos r*M—•ablof h«t ac «u*h bank oould Vorooairod to lsaroaoo i t* eaîtalboyoad that roojalrod for tho or*(aaitatlo& of a aatloaal bank latho ooao plaoo«

S# Yap rodoral fcoaonro Board*

Sootloa 2OS -Mould osoadtioa 10 of tho Fodoml iiooorro

so that la oolootiee tM»oahor* of tho fodoraloards tho * ro#idotit

h9 diroetad toporoon* wall ûalifloC bytioa or oxporioaoo or both toparticipate ia tho foravlatloaof aatioaal oeoaoaio aad aoaototypolioloa.*

S#otaoa 102 would ohoago thoof th» Fadoral Eaaorro Board

to tho **Board of aororaors of thorodoral Koocrro Syato»v,«o«ldtho t i t lo* of tho Uororaor oad vicoOovomer to ttuhaintaanaad wVloo(:hairaaaA«aad apparontly «o«ld pro-vido for tho roorgoaisatloa of tho3o«rd wlthia aiaoty day* aftor tho•aaitaittt of tho bill*Tho Soorotaryof tho Troaonry aad tho ..oafrtrollorof tho Curroaoy would ooaoo to««rvo oa tho Board aftor niaotgr daysfrcn tho oaaotaoat of t o b i l l j aadoaoh proooat appolatlvo ao»b«r would

(7)AOOopt voaato Billwith folloviag ohaaôat

l.XUalaatias prohibi-tion agaiact roappoint-aoiit artor sonriag14-yoar tors*

Board aoabar* ol-for rotiroaoat

vadar Fodoral hoaarroBotiroaoat

* o*ld aot aako ooa*ooooioa* to obtainthoaoDigitized for FRASER

http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

- 4 -

~ eeanmencatlens

eease to serve after the ninety-may period, tf upon the earlier

of his sueeeasor*

The new Beard would eoasl«tof seven members appointed by theresident, with the adviee and eon-

sent of the ienate, and servingfor fourteen-year terns, with thetanas staêred se that net torethan one wvftor* u tern would e»»pire in any two-year period*

The present prevision whichdireets the iresident. La eeleot-iag the êard aeri>or*# to "havedue regard to a fair rej>reseots>«tien of the finaneial#agrieultur-al, industrial, and nnwmmroial in-terests, and ceo^rai^hioal divi*siees of the oouiitry*1, would be re*taineu, and a new prcrrislon wouldbe added requiring at least two ofthe isetfibers to be "persons of test-ed banking experience"*

• provision weald be added re-quiring that not wore than fourioard aeribers shall be »e»sbers ofthe seise political party, and thatsMnbers of ciifferaat political par-ties shall be nappointed alternatelyas nearly as aay be praotioable**

(8).ualifioat.io«6 expressedla House Sill preferable4 butwould not make concessions toobtain i t .

(9) teeirable to eliminatethis, but would not mm eooneesslon to secure eli»»illation.


c?iate -':ecofgwen<Uit iocs

The of^rnor of the Board von Idbe exempted fro* the retirement thatno two appointive m r t i n of the J oerdnmy be s*lacted from the mam i ederaleierve district*

n the expiration of tholr teraviof office, —wboTS of the --oar*? wouldcontinue to t«rr« until thoirare Appointed and have qualified*

It would be Made oleer that theGovernor and *!©# Governor of the card,following their de*if nation by theresident, continue as mmh cmly "until

the further order* of the reeSdent.

If thi OoTensor't dealgnetios aatueh should be tenelaated# he eould eet-t ime to eerve at a member t^f the ioardfor the restaiader of his ten»f Irat if he

wi ihia ninety days fires theof the terRtittatioo of his designa-

tion as overnor, he vould sot be sub*j#et to ths provisions of existing lawwhich prohibit appointive oard asMberswho do not wmrfw out their lull ternstnm hold lag aay office, position, or

The Chairwan would net believed of the require«%ect that setwere than one - oerd Member »ay beselected from any one • ederal

d^striet*

lmm.

(10)Insist on louse provi-sion*

alar lea of loard seeibers would (ll)/©cept emate provision*be increased 1 ram Ît,000 a year to#16,000.

I oard SMSASTS appointed afterthe euaotaswit of the bill would notbe eligible for reappolntaeiit afterserving a full term of fourteenyears*

«* of the jasejbsri weald beby the ^resident as

asd one as vice (îtinwn of the"to serve as such for a term

esirable that this be

of four years'* *

.eirwen would not believed of the tsm*ye«r diembilityaâiaet holding any office, position,or afeployaent in a nesber tank if heresigned as a laesibsr of the ôerdafter his designation as ihalnemnhad expired*

(12) irst choicei Hease bill*sseart choice* Tera as

ohairwan sene as term asber e# Poard*

(13)issentlal to insist oniottee prevision, if firstehoiee on prece<5in* pointi e adopted*


i m I ifttiMt

ith a aeaber bank with*in two years after their service onthe foerd.

o»rd vould be required to keey<+e^rt of aotlnn te}«©n by It

y the :'«»f5#r*! 'tm <t 11 question0 ttttiotm *n<? a l l nttmr quvstiona of policy,&ra! t o inclrê in it«full ftooeunt of a l l ««oh ftetion

€ ompr«ii«« by limit*i t te policies .

Would make no concession toobtain change*

with a copy of tfc« recrrdii r«qutr»d to

8«rvt

•ectlosa gQ4(») woljid mud •ac-tion 11 'A the 1 «d«r*l e«#r»« Actto Nftk* i t el««r thRt th# imr<? nayaction to *i»«^Dat#d ran»t;«r«, offJ-cers, or r«pr«««!itativ«8 of th» ôarflthe ptrf «n*nm of any of i t a dutiaa,functloat or wmrwX^mm ot5*r thaa thadatar»ination of swtio&al orpoli«y# th» raakiRf of rulaa orUtlona, or tha «xarelaa of?*hieh tha a<Saral ^sarra • ot raouirasto be exercise;' by a speolfierf numberof

Qfeitted «t lr» 1 (15) - miaa crovliioxiable but would not iaafc*

i to obtain it*


House

5* Objectives of Federal heuerre Policy*

Section 2Q4(b) would add a new sub-section at the end of section 11 ofthe Federal iveeerve Act so as to makeit "the duty of the Federal reserveBoard to exercise such powers as itpossesses in such manner as to pro-mote conditions conducive to busi-

ness stability and to mitigate by itsinfluence unstabllising fluctuationsin the general level of production,trade, prices, and employment, so faras may be possible within the scope ofmonetary action and credit administra-tion. n

- 7 -

Senate

The specific provision would beomitted entirely, but, as indicat-ed below, section 204 would retainin section 12A of the federal ke-serve Act another provision re-garding the standard for openmarket operations*

R eoonsmend at i ons

(16) Insist on houseprovision or similar pro-vion* Suggest following com-promises

"The Federal ReserveBoard shall use its powersto maintain sound bankingand credit conditions and,so far as banking adminis-tration and monetary ac-tion may contribute tothis end, to restore andmaintain full and sustain-ed employment of labor aidof the productive oapaoityof the nation*"

6* Open Market operations*

Seotion 205 would amend section ISAof the Federal Reserve Act, effectiveninety days after enactment of thebill* The title of the Federal OpenMarket Committee would be changed tothe Open Market Advisory Committeesandit would consist of five representa-tives of the Federal Reserve banks(with alternates to serve in theirabsenoes) elected annually by thegovernors of the twelve Federal Ke-serve banks* The Committee would eleotits own chairman, and would meet uponthe call of the chairman of the Com-mittee or the call of the Governor of

Seotion 204 would amend seotion12A of the Federal iteserve Act, ef-fective ninety days after enactmentof the bill* The Federal Open Mar-ket Committee would consist of theseven members of the new board andfive annually-elected representa-tives of the Federal Reserve banks*One of the five Reserve Bank rep-resentatives would be eleoted bythe directors of the i ederal .Re-serve Banks of Boston, i*ew Yorkand hiladelphiaj one by thedirectors of the Federal ReserveBanks of Cleveland, Chicago

U 7 ) First choicetInsist upon House

ill except provide forselection of five membersof Open r arket AdvisoryCommittee on regionalbasis as provided InSenate Bill*

Second choiceiReduce Board to five

members serving for tenyear terms Andhave Open arket Committeeconsist of five Board mem-


,

House

the Board, but meetings would beo*lled whenever requested by amajority of the Cominittee membersof * majority of the board members*

The Federal reserve Board wouldfrom time to time prescribe theopen market policy of the federaljkes<?rve ystem, and It oould makechanges in the open market policyon its own initiative. Howerer theCommittee would consult and advisewith, and make recommendations tothe Federal Keserv© Board from tineto tine regarding the open marketpolicy of the ; ysteaj and the Boardwould hare to consult the Committeebefore making any change In the openmarket policy on its own initiative.The womaaittee would aid in the execu-tion of the open market policies andperform related duties prescribed bythe board* All transactions

- 8 -

benate

and St*Loulsj one by the direo-tors of the Federal reserve Banksof Richmond, Atlanta and . aliasjone by the directors of the Federalneserre Banks of Minneapolis,KansasCity and San franeiseof and one forthe country at large by the presi-dents of the twelve iederal reservebanks* An alternate for each rep-resentative would be elected in thesane manner as the representative*The Coanittee would meet upon callof the Chairman of the Board or atthe request of any three mer-bere ofthe Committee* The present provi-sions for the meetings being heldin Washington, and at least fourtimes a year, would be retained*

K

The Committee would consider*adopt, and transmit to the severalFederal e«erve banks, "regulations"relating to open-market transactionsof such banks and "relations of theFederal lieserve lyetem with foreigncentral or other foreign banks**

dat ions

bers and two iieserve bankgovernors, all iieserve bankgovernors to B9r^ in rota-tion for one year terms*Committee to control allthree monetary powerstOpen market operatlons,dis-count rates and changes in

requirements*

Third choicetAccept Senate plan except

reduce bank representationto four by eliminating theone selected at large*


- 9 -

Bouse

of federal Reserve banks under section14 of the Act would be subject to regu-lation, limitation, or restriction bythe Board* The provisions of section12A relating to the Board's power toregulate relations of the Federal lie-serve System with foreign central orother foreign banks would be eliminat-ed, but apparently with little effect,sinoe the power to control such rela-tions of Feueral iteserve banks wouldremain in the Board under section14(g) of the Federal Keserve Act.

federal iteserve banks would be re-quired to purchase or sell commercialpaper, government bonds and other suohobligations made eligible for purchaseunder seotion 14 of tuc federal ReserveAct in the manner and to the extent re-quired to effectuate the open marketpolicies adopted by the Boardj and theywould be required to cooperate in mak-ing such polioles effective*

The statement in seotion 12A thatopen market operations "shall be governedwith a view to accommodating commerce andbusiness and with regard to the generalcredit situation of the country* wouldbe eliminated* As shown above, anotherstandard would be prescribed for theBoard in section 204(b) of the bill*

.'. enatt) lieoommendat i ons

Reserve banks would be forbiddento "engage or decline to engage inopen-market operations except inaccordance with regulations adopt-ed by the Oomittee" •

(18) Insist on changeeliminating ary questionthat banks must complywith open market policyadopted by Board or Com-mittee.

Present provision would be re-tained, and no other standardvrould be prescribed*


-10-

House

7. Discount Ruteg*

In addition to requiring the FederalReserve Board to ooneult the Committeebefore making any changeB on ite owninitiative in the open market policy,seotion 205 would also require theBoard to consult the Committee beforesnaking such ohanges in the discountrates of Federal Reserve banks or thereserve requirements of member banks*

8. Requirements as to Eligibility of Paperfor Rediscount,

Seetlon 206 would add a paragraphto Seotion 15 of the Federal Reserve Actto permit Federal Reserve banks, subjeotto regulation by the Board as to xnaturl •ties and other matters, to rediscount anycommercial, agricultural, or industrialpaper upon the Indorsement of a memberbank, and to make advances to any memberbank on its promissory note secured byany sound assets of such member bank*In effeot, this would abolish all tech-nical requirements as to maturity andother matters relating to advances anddiscounts, and Instead give the Boardpower to regulate such questions*

Senate

Seotion 205(b) would amend seo-tion 14 of the Federal Reserve Actto require eaoh Federal Reserve bankto establish every fourteen days, oroftener if deemed necessary by theBoard, discount rates subject to re-view and determination by the Board*

Seotion 20S would amend seotion10(b) of the Federal Reserve Act sothat whenever any member bank has noeligible and acceptable assets avail-able to enable it to obtain adequatecredit accommodations at the FederalReserve bank, any Federal Reservebank, under rules and regulationsprescribed by the Board, wou&d bepermitted to make advances to suohmember bank on its time or demandnotes secured to the satisfactionof the Reserve bank* However, suohnote's would bear Interest at a ratenot less than 1 percent per annumhigher than the highest discountrate at suoh Reserve bank on thedate of suoh note*

Heoommendat ions

(19) Aooept Senate Amend-ment*

(20) Insist upon House Billchanged as followst (a) per-mit advances for periods notexoeedlng nine months, and(b) strike out "secured by anysound asset8 of suoh memberbank" and substitute "securedto the satisfaction of suohFederal Reserve Bank*"Under no circumstances shouldthis provision be furthercompron.'isec, as this one ofthe most essential provisionsof the Bill.


House

- U -

Senate Reoommendat ione

Government Obligations and GovernmentGuarant eed Ob1igat ions*

oeotion 207 would amend section 14(b)of the Federal Heserve Act to provide thatobligations of the United States and thosefully guaranteed as to principal and inter-est by the United States may be purchasedand sold by Federal Reserve banks withoutregard to maturities*

10, Federal Reserve Note Issue Requirements,

Seotion 208 would amend section 16of the Federal Heserve Act to renove allprovision for specific collateral Beour-ing Federal Reserve notes and abolish thepresent prooedure by which they are issuedto the banks by the Board through the Fed-*eral Reserve agents*

Instead, Federal Keserve notes wouldbe Issued and retired directly by theFederal Reserve banks under rules andregulations prescribed by the Boardi andall provision for their redemption wouldbe eliminated, together with all provi-sion for the redemption fund now keptwith the Treasurer of the United Statesfor that purpose. Federal Reserve bankswould no longer be forbidden to pay outthe Federel Heeerve notes of another

oeotion 205(a) contains the sameprovision! but would add a provisionlimiting purchases of direct govern*ment obligations and of governmentguaranteed obligations to purchasesin the open market*

Omitted entirely*

(21) House bill desirable.Understand Secretary ofTreasury opposed to Senateprovision. If compromisenecessary, add proviso per-mitting temporary accommoda-tions to Treasury for shortperiods on tax payment datesand other similar dates*

(22) House bill desirablebut can be waived*


louse

- 12 -

Senate It ec ommendat ions

Federal Reserve bank* The existing pro*visions authorising the Board to imposea tax on Federal Keserre notes outstand-ing in excess of the gold certificatesheld as collateral, and to refuse a par*ticular application of a Federal Reservebank for federal Reserve notes* would beeliminated*

Federal Reserve notes would remaina first lien on all the assets of theissuing bank* Forty percent reserves ingold certificates would still be main-tained against Federal Reserve notes inactual circulation| and thirty-five per-cent lawful money reserves required to bemaintained by Federal Reserve banks againstdeposits could not include federal Reservenotes or Federal Reserve bank notes*

Federal Reserve notes reoeived bythe treasurer of the United States fromsources other than Federal Reserve bankswould be canceled and retired if unfitfor further use, and the Issuing bankwould reimburse the Treasurer of theUnited States therefor* Federal Reservenotes unfit for further use when reoeivedby federal Reserve banks would be for*warded to Washington* canceled and retired!and if such notes were issued by anotherFederal Reserve bank* the issuing bankwould make reimbursement*


louse Senate Kecommendations

11* i eeerve Requirements of Member Banks*

S«otion 209 would mend section 19 Section 206 is the stone* exceptthat it would require the affirmativevote of at least five Board member8 inorder to change the requirementsj ancthe Board would be forbidden to reduoethe requirements below the present re-quirements, or to inorease them to

of the Federal Reserve Act to permit theBoard to change the reserve requirementsof member banks "in order to prevent in*.jurioue credit expansion or contraction")and to eliminate the necessity for firsthaving a declaration, upon the affirmative

vote of five Board members and the approval ôre than twice the present requirements,of the President, that "an emergency existsby reason of credit expansion*M The changesoould be made for member banks located inreserve and oentral reserve cities» for mem-ber banks not in vaerre or oentral reservecities, or for all member banks*

Real Estate Loans*

Section 210 would make the followingchanges in the provisions of section 24of the Federal Reserve Act regarding loansby national banks on improved real estate:

(1) The requirement that the real es-tate upon which such loans are made mustbe located in the bank's Federal Reservedistrict, or within 100 miles of the placein which the bank is located would beeliminated*

(2) The definition which requires thebank to take the entire amount of theobligation would be eliminated*

Section 207 contains the followingprovisions regarding loans by nationalbanks on improved real estates

(1) Present geographical limitationswould be retained*

(2) Present definition would be re-

tained*

(23) Compromise .Amendments*First choicet

House bill with inoreaselimited to amount necessaryto absorb amount of excess re-serves end vault cash existingat the time of Increase aidprovide minimum reserve re-quirements as in Senate bill*

Second choioeiSenate bill with require-

ment of five affirmative voteseliminated*

In any compromise that ismade insist on elimination ofrequirement of 5 votes*

(24) Suggested compromise:

Yield to Senate.

Yield to Senate.


ouse Keoonmeisdat lent

(S) The five year limitation on ma-turities would bo eliminated and thelimitation to 60 percent of the actualvalue would be changed to 00 percentof the appraised value* This wouldnot prevent tho renewal or extensionof eirlstin*: loans* and tho existingexemption of mortgages Insured undorTitle II of tho Rational Housing Aotwould te retained*

(4) Permissible aggregate of sueh»uld bo changed from 26 poroont

of bank's paio-ln ssd «miMpalrod oap-ital aad surplus* or 80 poroont of Itssavings doposits uhlohovor is groator*to 100 poroottt of its paid-in and tan*iapolrod capital and surplus or 60 par*csnt of Its tins and tarings doposits*whlohoTor is groator*

(6) Tho 1 edoral osorv« oard wouldbo authorised to rogulato and limittho making of roal • state loans byaosbor banks so as to rooîro thobanks to oonfor* to sound practices.

(3) Loans wuld bo limited tof ITO yoars and 60 poroont of ap»pralsod value of property* exooptthat (a) snortisod loans oould bowado in amounts not oxoooding 00poroont of appraised value and forterns not esooodiag ten yosrs* ifInstallment peymewta are suffloiontto roduoo prinoipal at least 80poroomt wltnln ten years g aad (b)restrlotions would not prevent re-newal or extension of present loans*and would not apply to nertgagoainsurod undor Title II of thetlocal ousint Aot«

Aooept enate provision Unitingto 10 year naturltyi but insist onehange requiring installment paymentssuffioient to retire entire loan intwenty yoars* instead of SO poroont inton years* This very essential and nofurther compromise should bo made onthis provision*

(4) mm. o* x*

(6) Ctoitted entirely* (25) Smggost following compromiset^he board of Governors of thoedoral Pesorre .^«tom is author*ited to proscribe fro* time totime* within the foregoing maxisnmlimitations* regulations gorerningtho making of roal estate loans bymember banks* with a view of re-quiring sueh banks to oonform tosound praotiees in moklnc roalestate loans} and all member banksshall oomply with the prorlsi<


- 15 -

iiouse Senate

The provision of emotion 24 whichprohibits national banks from paying arate of interest on deposits greaterthan that permitted by law for Statebanks or trust companies in the ^tatein which the national bank is locatedwould be eliminated*

Seme*

Reooaanendat ions

of this section and the regula-tions, if any* issued pursuanttheretos Provided, however.That this shal 1 not preventState banlrs and trust companiesfrom making real estate loansto the extent expressly author-ised by specific provisions ofState law."

0, K.


Documents

cmnxascz OF TITL? II AS PASSED BY TEK aoos« Ayr «r aouao...a* tao Board atglit doos r*M—• ablof h«t ac «u*h bank oould Vo rooairod to lsaroaoo it* ea^ital boyoad that roojalrod

cmnxascz OF TITL? II AS PASSED BY TEK aoos« Ayr «r aouao...a* tao Board atglit doos rM—• ablof h«t ac «uh bank oould Vo rooairod to lsaroaoo it* ea^ital boyoad that roojalrod