FeperaL RESERVE Act 
examiners selected or approved by the Federal Reserve Board. 
Whenever the directors of the Federal reserve bank shall approve the examinations 
made by the State authorities, such examinations and the reports thereof may be 
accepted in lieu of examinations made by examiners selected or approved by the 
Federal Reserve Board: Provided, however, That when it deems it necessary the board 
may order special examinations by examiners of its own selection and shall in all cases 
approve the form of the report. The expenses of all examinations, other than those 
made by State authorities, shall be assessed against and paid by the banks examined. 
If at any time it shall appear to the Federal Reserve Board that a member bank has 
failed to comply with the provisions of this section or the regulations of the Federal 
Reserve Board made pursuant thereto, it shall be within the power of the board after 
hearing to require such bank to surrender its stock in the Federal reserve bank and to 
forfeit all rights and privileges of membership. The Federal Reserve Board may restore 
membership upon due proof of compliance with the conditions imposed by this section. 
Any State bank or trust company desiring to withdraw from membership in a Federal 
reserve bank may do so, after six months’ written notice shall have been filed with the 
Federal Reserve Board, upon the surrender and cancellation of all of its holdings of 
capital stock in the Federal reserve bank: Provided, however, That no Federal reserve 
bank shall, except under express authority of the Federal Reserve Board, cancel within 
the same calendar year more than twenty-five per centum of its capital stock for the 
purpose of effecting voluntary withdrawals during that year. All such applications 
shall be dealt with in the order in which they are filed with the board. Whenever a 
member bank shall surrender its stock holdings in a Federal reserve bank, or shall be 
ordered to do so by the Federal Reserve Board, under authority of law, all of its rights 
and privileges as a member bank shall thereupon cease and determine, and after due 
provision has been made for any indebtedness due or to become due to the Federal 
reserve bank it shall be entitled to a refund of its cash paid subscription with interest 
at the rate of one-half of one per centum per month from date of last dividend, if earned, 
the amount refunded in no event to exceed the book value of the stock at that time, and 
shall likewise be entitled to repayment of deposits and of any other balance due from 
the Federal reserve bank. 
No applying bank shall be admitted to membership in a Federal reserve bank unless 
(a) it possesses a paid-up, unimpaired capital sufficient to entitle it to become a national 
banking association in the place where it is situated under the provisions of the National 
Bank Act, or (b) it possesses a paid-up, unimpaired capital of at least 60 per centum of 
the amount sufficient to entitle it to become a national banking association in the place 
where it is situated under the provisions of the National Bank Act and, under penalty 
of loss of membership complies with rules and regulations which the Federal Reserve 
Board shall prescribe fixing the time within which and the method by which the unim- 
paired capital of such bank shall be increased out of net income to equal the capital 
which would have been required if such bank had been admitted to membership under 
the provisions of clause (a) of this paragraph: Provided, That every such rule or regula- 
tion shall require the applying bank to set aside annually not less than 20 per centum of 
its net income of the preceding year as a fund exclusively applicable to such capital 
Increase. 
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