1994 US Code
Title 12 - BANKS AND BANKING
CHAPTER 2 - NATIONAL BANKS
SUBCHAPTER VI_2 - SUBCHAPTER VI-CAPITAL AND STOCK OF FEDERAL RESERVE BANKS; DIVIDENDS AND EARNINGS
Sec. 289 - Dividends and surplus funds of reserve banks

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§289. Dividends and surplus funds of reserve banks (1) Stockholder dividends (A) In general

After all necessary expenses of a Federal reserve bank have been paid or provided for, the stockholders of the bank shall be entitled to receive an annual dividend of 6 percent on paid-in capital stock.

(B) Dividend cumulative

The entitlement to dividends under subparagraph (A) shall be cumulative.

(2) Deposit of net earnings in surplus fund

That portion of net earnings of each Federal reserve bank which remains after dividend claims under paragraph (1)(A) have been fully met shall be deposited in the surplus fund of the bank.

(3) Payment to Treasury

During fiscal years 1997 and 1998, any amount in the surplus fund of any Federal reserve bank in excess of the amount equal to 3 percent of the total paid-in capital and surplus of the member banks of such bank shall be transferred to the Board for transfer to the Secretary of the Treasury for deposit in the general fund of the Treasury.

(Dec. 23, 1913, ch. 6, §7(a), 38 Stat. 258; Mar. 3, 1919, ch. 101, §1, 40 Stat. 1314; June 16, 1933, ch. 89, §4, 48 Stat. 163; Aug. 10, 1993, Pub. L. 103–66, title III, §3002(a), 107 Stat. 337; Sept. 23, 1994, Pub. L. 103–325, title VI, §602(d), 108 Stat. 2291.)

Codification

Section is comprised of subsec. (a) [formerly first undesignated par.] of section 7 of act Dec. 23, 1913. Subsecs. (b) and (c) of section 7 are classified to sections 290 and 531, respectively, of this title.

Amendments

1994—Par. (1)(B). Pub. L. 103–325, §602(d)(1), inserted “(A)” after “subparagraph”.

Par. (2). Pub. L. 103–325, §602(d)(2), substituted “paragraph (1)(A)” for “subparagraph (A)”.

1993—Pub. L. 103–66 inserted section catchline and amended section generally. Prior to amendment, section read as follows: “After all necessary expenses of a Federal reserve bank shall have been paid or provided for, the stockholders shall be entitled to receive an annual dividend of 6 per centum on the paid-in capital stock, which dividend shall be cumulative. After the aforesaid dividend claims have been fully met, the net earnings shall be paid into the surplus fund of the Federal reserve bank.”

1933—Act June 16, 1933, provided that net earnings shall be paid into surplus instead of to the United States as a franchise tax.

Effective Date of 1933 Amendment

Section 4 of act June 16, 1933, provided that the amendment made by that section is effective July 1, 1932.

Additional Transfers for Fiscal Years 1997 and 1998

Section 3002(b) of Pub. L. 103–66 provided that:

“(1) In general.—In addition to the amounts required to be transferred from the surplus funds of the Federal reserve banks pursuant to section 7(a)(3) of the Federal Reserve Act [12 U.S.C. 289(3)], the Federal reserve banks shall transfer from such surplus funds to the Board of Governors of the Federal Reserve System for transfer to the Secretary of the Treasury for deposit in the general fund of the Treasury, a total amount of 6,000,000 in fiscal year 1997 and a total amount of 7,000,000 in fiscal year 1998.

“(2) Allocation by fed.—Of the total amount required to be paid by the Federal reserve banks under paragraph (1) for fiscal year 1997 or 1998, the Board of Governors of the Federal Reserve System shall determine the amount each such bank shall pay in such fiscal year.

“(3) Replenishment of surplus fund prohibited.—No Federal reserve bank may replenish such bank's surplus fund by the amount of any transfer by such bank under paragraph (1) during fiscal years 1997 and 1998.”