NATIONAL BANKING UNDER THE FEDERAL RESERVE SYSTEM 
State Banks as Members 
As amended by act approved June 21, 1917 (40 Stat., 232, chap. 32); act approved 
July 1, 1922 (42 Stal., 821, chap. 274); act approved Mar. 4, 1923; act approved Feb. 25, 
1927. 
Sec. 9. Any bank incorporated by special law of any State, or organized under the 
general laws of any State or of the United States, desiring to become a member 
of the Federal reserve system, may make application to the Federal Reserve Board, 
under such rules and regulations as it may prescribe, for the right to subscribe to 
the stock of the Federal reserve bank organized within the district in which the applying 
bank is located. Such application shall be for the same amount of stock that the applying 
bank would be required to subscribe to as a national bank. The Federal Reserve 
Board, subject to the provisions of this Act and to such conditions as it may prescribe 
pursuant thereto, may permit the applying bank to become a stockholder of such 
Federal reserve bank. 
Any such State bank which, at the date of the approval of this Act, has established 
and is operating a branch or branches in conformity with the State law, may retain and 
operate the same while remaining or upon becoming a stockholder of such Federal 
reserve bank; but no such State bank may retain or acquire stock in a Federal reserve 
bank except upon relinquishment of any branch or branches established after the 
date of the approval of this Act beyond the limits of the city, town, or village in which 
the parent bank is situated. 
In acting upon such application the Federal Reserve Board shall consider the finan- 
cial condition of the applying bank, the general character of its management, and 
whether or not the corporate powers exercised are consistent with the purposes of this 
act. 
Whenever the Federal Reserve Board shall permit the applying bank to become a 
stockholder in the Federal reserve bank of the district its stock subscription shall be 
payable on call of the Federal Reserve Board, and stock issued to it shall be held sub- 
ject to the provisions of this act. 
All banks admitted to membership under authority of this section shall be required 
to comply with the reserve and capital requirements of this act and to conform to those 
provisions of law imposed on national banks which prohibit such banks from lending 
on or purchasing their own stock, which relate to the withdrawal or impairment of their 
capital stock, and which relates to the payment of unearned dividends. Such banks and 
the officers, agents, and employees thereof shall also be subject to the provisions of and 
to the penalties prescribed by section fifty-two hundred and nine of the Revised 
Statutes, and shall be required to make reports of condition and of the payment of 
dividends to the Federal reserve bank of which they become a member. Not less than 
three of such reports shall be made annually on call of the Federal reserve bank on dates 
to be fixed by the Federal Reserve Board. Failure to make such reports within ten 
days after the date they are called for shall subject the offending bank to a penalty of 
$100 a day for each day that it fails to transmit such report; such penalty to be col- 
fected by the Federal reserve bank by suit or otherwise. 
As a condition of membership such banks shall likewise be subject to examinations 
made by direction of the Federal Reserve Board or of the Federal reserve bank by 
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