NarioNAL BANKING UNDER THE FEDERAL RESERVE SYSTEM 
NATIONAL DANKING UNDER THE YEDERAL RESERVE SYSTEM 
transactions engaged in under authority of this subsection. Such books and records 
shall be open to inspection by the State authorities to the same extent as the books and 
records of corporations organized under State law which exercise fiduciary powers, 
but nothing in this Act shall be construed as authorizing the State authorities to 
examine the books, records, and assets of the national bank which are not held in trust 
under authority of this subsection. 
No national bank shall receive in its trust department deposits of current funds sub- 
ject to check or the deposit of checks, drafts, bills of exchange, or other items for col- 
lection or exchange purposes. Funds deposited or held in trust by the bank awaiting 
investment shall be carried in a separate account and shall not be used by the bank 
in the conduct of its business unless it shall first set aside in the trust department 
United States bonds or other securities approved by the Federal Reserve Board. 
In the event of the failure of such bank the owners of the funds held in trust for in- 
vestment shall have a lien on the bonds or other securities so set apart in addition to 
their claim against the estate of the bank. 
Whenever the laws of a State require corporations acting in a fiduciary capacity, to 
deposit securities with the State authorities for the protection of private or court trusts, 
national banks so acting shall be required to make similar deposits and securities so 
deposited shall be held for the protection of private or court trusts, as provided by the 
State law. 
National banks in such cases shall not be required to execute the bond usually 
required of individuals if State corporations under similar circumstances are exempt 
from this requirement. 
National banks shall have power to execute such bond when so required by the laws 
of the State. 
In any case in which the laws of a State require that a corporation acting as trustee, 
executor, administrator, or in any capacity specified in this section, shall take an oath 
or make an affidavit, the president, vice president, cashier, or trust officer of such 
national bank may take the necessary oath or execute the necessary affidavit. 
It shall be unlawful for any national banking association to lend any officer, director, 
or employee any funds held in trust under the powers conferred by this section. Any 
officer, director, or employee making such loan, or to whom such loan is made, may be 
fined not more than $5,000, or imprisoned not more than five years, or may be both 
fined and imprisoned, in the discretion of the court. 
In passing upon applications for permission to exercise the powers enumerated in this 
subsection, the Federal Reserve Board may take into consideration the amount of 
capital and surplus of the applying bank, whether or not such capital and surplus is 
sufficient under the circumstances of the case, the needs of the community to be served, 
and any other facts and circumstances that seem to it proper, and may grant or refuse 
the application accordingly: Provided, That no permit shall be issued to any national 
banking association having a capital and surplus less than the capital and surplus 
required by State law of State banks, trust companies, and corporations exercising 
such powers. 
(1) To employ such attorneys, experts, assistants, clerks, or other employees as may 
be deemed necessary to conduct the business of the board. All salaries and fees shall 
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