Federal · Title 12 — Banks and Banking

12 U.S.C. § 374a: Acting as agent for nonbanking borrower in making loans on securities to dealers in stocks, bonds, etc.; penalties

Civil

What this law says, in plain English

Member banks are prohibited from acting as agents for nonbanking entities in making loans secured by investment securities to stock/bond dealers. Violations are subject to civil fines up to $100 per day.

Read the full statutory text

No member bank shall act as the medium or agent of any nonbanking corporation, partnership, association, business trust, or individual in making loans on the security of stocks, bonds, and other investment securities to brokers or dealers in stocks, bonds, and other investment securities. Every violation of this provision by any member bank shall be punishable by a fine of not more than $100 per day during the continuance of such violation; and such fine may be collected, by suit or otherwise, by the Federal reserve bank of the district in which such member bank is located.

Verify at the official source: Federal legislative text

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This page is legal information, not legal advice. Code text is sourced from official publications and may lag amendments — always confirm at the official source linked above. Plain-English summaries and relationship data are AI-derived and reviewed on an ongoing basis; verify with a licensed attorney before acting.